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Dubai equities continue gains in February

DFM up for fourth straight month, up 3.4% to close at 4,308.8 points

The DFM General Index recorded the third-biggest monthly gain in the GCC during February, a report showed on Sunday.

According to Kamco Invest’s GCC Markets Monthly Report, the benchmark was up for the fourth consecutive month after recording a gain of 3.4 per cent last month to close at 4,308.8 points. The monthly sector performance chart was skewed towards decliners with five out of eight sector indices recording declines while the remaining three saw gains.

Gains in the financial sector (+5.5 per cent ) and the real estate sector (+9.8 per cent ), the two of the three largest weighted sectors in the market, supported the overall gains during the month. Five out of the seven companies in the real estate sector witnessed gains during February, led by the 26.8 per cent gain in shares of union properties. In the financial sector, the 46.2 per cent gain in shares of Commercial Bank of Dubai was one of the main underlying reasons for the sector’s gains during the month. Comparatively, the consumer discretionary index reported a 4.5 per cent decline during February, the biggest drop among the indices, followed by the consumer staples index with 3.4 per cent drop during the similar period.

Trading activity on the exchange witnessed moderate growth during February-2024. Total volume traded increased by 15.9 per cent to reach 3.5 billion shares as compared to 3.0 billion shares during January 2024. Similarly, the total value of shares traded during the month increased at a relatively lower pace of 1.2 per cent to reach Dh7.9 billion in February-2024 as compared to Dh7.8 billion during January-2024. Union Properties topped the monthly volumes traded chart recording 677.5 million shares which changed hands during the month, followed by Shuaa Capital and Takaful Emarat Insuarnce which saw 21343.8.5 million and 201.6 million of their shares change hands during the month, respectively.

On the monthly value traded chart, Emaar Properties topped the list with Dh1.4 billion worth of shares changing hands during the month, followed by Emirates NBD, and Dubai Islamic Bank which saw Dh1.2 billion and Dh1.0 billion value of their shares traded, respectively.

On the economic front, Dubai’s Chamber of Commerce forecasted a 5 per cent growth for Dubai’s economy in 2024. Bulk of the growth is expected to be driven by investments in infrastructure, conducive business environment and the possibility of interest rate cuts. On the other hand, Dubai’s real estate market has already started the year robustly as it recorded $9.6 billion in sales during January-2024 registering a 27 per cent y-o-y increase. Sales transactions increased by 17 per cent y-o-y surpassing 11,000 during January-2024 as compared to 8,712 sales transactions in January-2023

In Abu Dhabi, the FTSE ADX index continued its declining trend in 2024 by recording a 2.7 per cent fall last month to close at 9,254.81 points. The decline also steepened the fall in terms of YTD-2024 performance that reached –3.4 per cent.

Among the ten sector indices on the ADX, eight recorded declines during the month while the remaining two witnessed gains. The healthcare index posted the largest fall among the indices during February with a decline of 14.7 per cent to close the month at 2,951.0 points. The decline was led by fall in prices of all constituent stocks of which three companies recorded double-digit declines.

The industrials index recorded the second-largest monthly fall during February-2024 with a 6.5 per cent drop to close the month at 2,967.6 points. The telecommunication Index followed as the third biggest monthly decliner recording a 5.5 per cent fall in February mainly due to the 2.2 per cent share price fall of Al Yah Satellite Communications. Comparatively, the real estate index gained 5.9 per cent, the biggest gain among the indices, mainly driven by 8.4 per cent gain in shares of Al Dar Properties.

In terms of monthly stock performance, Sharjah Insurance Company topped the monthly gainers chart for February 2024 with its share price increasing by 27.4 per cent followed by RAPCO Investment and Feeding Company and Fujairah Building Industries, which recorded gains of 21.2 per cent and 17.6 per cent , respectively. On the decliner’s side, Eshraq Investments lead the way registering a 32.2 per cent fall in its share price during February-2024 followed by Abu Dhabi National Takaful and Multiply Group which saw share price declines of 25.5 per cent and 21.5 per cent respectively.

Trading activity on the exchange fell in February after recording a mixed performance in January . Total volume of shares traded declined by 1.9 per cent in February to reach 5.0 billion shares as compared to 5.1 billion shares during the previous month. On the other hand, the total value of shares traded recorded a decline of 22.0 per cent to reach Dh18.6 billion as compared to Dh23.8 billion in January-2024. Eshraq Investments topped the list of the most active stocks table during the month with 983.5 million traded shares followed by Dana Gas and Multiply Group, which traded 725.5 million shares and 520.6 million shares respectively.

In terms of value traded, IHC topped the table with Dh4.3 billion worth of shares changing hands during the month followed by Alpha Dhabi Holding and Al Dar Properties at Dh1.9 billion and Dh1.4 billion, respectively.

In economic news, the UAE real estate market continued to remain vibrant and is expected to grow this year with several projects currently in the planning stage and ready for launch including the project to build over 7 thousand residential units in the UAE. Moreover, Abu Dhabi’s real estate transactions passed Dh5 billion during January-2024 comprising 1,386 transactions of sales and mortgages on various types of real estate units. The real estate sector of the UAE is one of the main drivers of the economy as it is supported by government initiatives which are intended to diversify the economy from over-dependence on oil.

In the wider region, positive sentiments across financial markets globally pushed GCC market index to the highest level since November 2022 during the third week of February. The MSCI GCC index remained elevated by the end of the month and closed after receding marginally in the last week with gain of 4.2 per cent . The positive performance came despite three out of seven exchanges in the GCC witnessing declines during the month. The monthly gains also fully offset the declines during January-2024 resulting in a YTD-2024 gain of 3.3 per cent for the MSCI GCC Index.

Saudi Arabia was the best performing market during the month with a gain of 7.1 per cent followed by Qatar and Dubai with gains of 3.8 per cent and 3.4 per cent , respectively.

The sector performance for the GCC showed a broad-based growth in all sectors with the insurance index at the top with a gain of 19.5 per cent followed by consumer durable & apparel and healthcare indices with gains of 12.6 per cent and 11.4 per cent , respectively. Large-cap sectors like energy and banks showed low-single digit gains of 3.5 Per cent and 3.8 Per cent , respectively. Healthcare and insurance also featured in the top 5 sectors by ytd-2024 performance with double-digit returns. In terms of trading activity, value traded during february-2024 declined m-o-m but remained elevated at the second-highest level in 21 months.