News Column

Equities set to sustain rally in post-Eid trade

August 3, 2014

Market to gain momentum on strong Q2 results

The UAE stocks are expected to witness a strong rally when trading resumes today for the first full week after post-Eid holidays, analysts say.

The equities will gain momentum on better than expected second-quarter results. Real estate, construction and banking shares are likely to drive the market in coming weeks.

"Investors are likely to step in trading ring after a month-long Ramadan and Eid holidays. The Holy month of Ramadan is traditionally considered a quite month as main stock players preferred to stay on the sidelines," according to a senior stock analyst.

"So we can expect a bullish trend starting from the first day of the trading in post-Eid session," he added.

Last week, the markets opened for only two sessions — one before three-day holidays and the second after Eid. Both the sessions sustained bullish activities and analysts expect that the same trend will prevail in days to come.

Dubai Financial Market (DFM) benchmark index increased by 3.90 per cent last week to close at 4,833.24 points while Abu Dhabi's General Index witnessed 2.06 per cent gain and closed at 5,054.95 points.

Usually investors don't take much interest in the market during Ramadan, but last month was a record month for the markets as Dubai stocks gained the most in almost seven years in July that helped to recover some of the losses sustained in the bearish market that wiped a quarter of the benchmark index in June. The Index advanced by 23 per cent in July — the strongest gain since October 2007.

Dubai's share market entered into bearish territory after warnings from the UAE'sCentral Bank that the country's property market may be overheating. Shareholder and management changes at Arabtec further stoked investors' concern in the market. Arabtec shares lost 61 per cent in June.

Last week, Arabtec emerged as one of the top trading and value gainers stocks as its share price jumped by 6.25 per cent to Dh4.25 with 78 million shares exchanged hands. The stock climbed 63 per cent in July. Last week, Arabtec declared its second-quarter financial results that jumped by 11 per cent to Dh103 million.

Property stocks are expected to perform well during the week, specially after Damac Properties' DFM offer. Last week, the property developer offered its Global Depository Receipts holders the option to convert them into ordinary shares that would be listed on Dubai's main Index.

"We now look forward to joining other prominent Dubai companies on the DFM as we continue to work hard to create value for our investors," Damac Properties chairman Hussain Sajwani said in a statement.

Overall property stocks performed very well during July. Deyaar Development's share price appreciated by 39 per cent to close at Dh1.26. Union Properties stock jumped by 34 per cent to Dh2.16.

The Index heavy weight Emaar Properties stocks price increased by more than 16 per cent to Dh9.77. The property giant has not announced its second-quarter result, which is expected to be announced in coming days. Investors pin high hopes on Emaar results, which may extend the market rally this month.

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Source: Khaleej Times (United Arab Emirates)

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