News Column

UAE market volatility may continue for months

June 9, 2014

Andy Staples Editor — Universal Copy Desk



Dubai: Corrections on the UAE stock markets could continue until September, an expert said — but predicted new highs after that.

The Dubai Financial Market index lost just over 4 per cent of its value today, closing at 4,771.1, with main market driver Arabtec bearing the brunt. It shed nearly 10 per cent of its value, much of it in a flurry of trading in the last 40 minutes before the market closed at 2pm.

Abu Dhabi fared better, with the Abu Dhabi Securities Exchange index (ADX), losing 1 per cent of its value to close at 4.948.1

"We are still positive on the market," said Marwan Shurrab, fund manager and head of trading at Vision Investments & Holdings. "This is a correction phase, which is expected after strong performance from the beginning of the year. There are certain levels which will provide strong support."

He said he felt these support levels — points at which prices tend rise again as buyers take advantage of the lower values — were around 4,500 for Dubai, and 4600 for the Abu Dhabi Securities Exchange.

Mousa Haddad, a fund manager at the National Bank of Abu Dhabi, said: "I think the markets are in a correction phase in general. This started in April when the markets were above 5,000.

"It's been volatile, and the risk has been high. The markets are seeing a correction happening, and I think it will continue until August or September, after Ramadan and the summer holidays.

"We are in for a rocky, volatile period, but this doesn't change the longer term view: towards the end of the year we will see more highs for Dubai, Abu Dhabi and the Mena markets."

But at the moment, he believed, "values are expensive compared to the international markets".


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Source: Gulf News (United Arab Emirates)


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