News Column

DFM ends week with 1.67% gain

August 14, 2014

Sarah Diaa Staff Reporter

Abu Dhabi: The Dubai Financial Market (DFM) index ended the week with a total of 1.67 per cent increase, as the index gained 0.17 per cent on Thursday to reach 4,813.06 with trade volumes remaining low throughout the week.

Meanwhile, the Abu Dhabi Securities Exchange (ADX) general index gained 2.58 per cent this week, with the index rising one per cent on Thursday to reach 5,052.94.

Analyst Osama Al Ashry commented on the performance of DFM, saying that the index is trading in downtrend, which is made worse by the low trade values.

"A lot of the stocks are oversold, and the DFM index has shot up 250 per cent since the beginning of 2013 when it was at 1,500. Naturally, there needs to be a correction, but we can still be optimistic as long as the index remains at its current levels that are close to the resistance of 5,267," he said.

Discussing individual stocks, Al Ashry, a member of UK organisation, Society of Technical Analysts, said that the movement of Emaar share prices resembles the movement of the DFM index. With a strong weight on the index, the real estate developer can support the index if Arabtec tries to drag it down.

On Thursday, Emaar share prices went down 0.5 per cent to reach Dh10.05, but Al Ashry said the stock has a resistance level of Dh10.8, which, if crossed, can see prices at Dh12. On the medium term, the outlook for Emaar is positive, with share prices possibly even reaching Dh15 by the end of the year.

Additionally, Gulf Finance House also appears to be promising on the long term, with the bank announcing positive financial results on Thursday net profits for Q2 2014 were $9.5 million, an increase from the $2.7 million in the same period last year.

Other stocks with positive outlook on the medium and long term include Dubai Islamic Bank, Air Arabia, and Tabreed, according to Al Ashry.

In Abu Dhabi, the ADX general index crossed the 5,000 resistance level for two days in a row despite significantly low trade values. Such index levels boost positive expectations on the medium term, as the index shows signs of potentially reaching 5,500 by the year end.

"Aldar Properties appears to be promising, especially after announcing their financial results for Q2. I think it can reach its resistance level of Dh5 on the medium or long term even if it doesn't end at that level, but that can only happen if it crosses Dh4.21," the analyst said.

Other stocks with positive outlook in Abu Dhabi include First Gulf Bank, and Etisalat.

As for the geopolitical environment, Sebastien Henin, head of asset management at The National Investor, dismissed its influence on the UAE bourses.

"So far, the market has been very resilient to the very challenging regional news flow from Iraq, Libya, and Syria. For me, it was a surprise, but I think that as long as these problems are contained out of the GCC block, markets shouldn't react too much," he said.

Henin added, "I think investors have understood that it will not have an impact on the GCC economies. The first reason is from a security point of view, and second, from an economical point of view because there's almost no trade between these countries and the GCC so it's not like exports will go down."

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Gulf News (United Arab Emirates)

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