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DFM Shares Snap Out of Five-day Losing Streak

DUBAI — Dubai shares snapped a five-day losing streak on Thursday to cap a volatile trading week in positive territory, as investors set aside worries about Dubai’s debts and bought cheaper blue chip stocks.

The most heavily-traded stock, Emaar Properties, the Gulf region’s biggest property developer, added 2.2 per cent at Dh3.67. Arabtec Holding, the country’s largest construction company, climbed by 2.3 per cent to Dh1.83. Low-cost carrier Air Arabia, gained 2.2 per cent at Dh0.92. Stock market operator Dubai Financial Market PJSC, which is seeking regulatory approval of its $121 million buyout of rival Nasdaq Dubai, edged up by 2.2 per cent at Dh1.83. Emirates NBD, the UAE’s biggest bank by assets, climbed by 2.1 per cent to Dh2.95.

At Nasdaq Dubai, Dubai-based jeweller Damas International Limited, went up by 1.9 per cent to 16 cents after it raised its foreign ownership to 46.12 per cent. DP World, the world’s fourth largest operator, was down by half a per cent at 41 cents.

Stocks that were battered by recent negative sentiment in Dubai, were snapped up by bargain hunters in late trading, lifting the main index of the Dubai Financial Market by 1.4 per cent at 1,759.21. The index though was 6.3 per cent lower from the previous trading week. The benchmark index of the Abu Dhabi Securities Exchange was flat at 2,700.40, and was barely changed from last week. Volumes remained light with the value of shares traded in both bourses hitting just Dh549 million.

“Dubai had much better support into any weakness. I think we will consolidate here for a few sessions now, but it will remain volatile as retail investors adjust their portfolios in the year end,” said Matthew Wakeman, managing director at cash-and-equity-linked trading at EFG Hermes.

Dubai shares have been retreating since November 25 when the state-owned conglomerate Dubai World called for a restructuring of its debts, sending shockwaves to global markets. Credit rating agencies quickly reacted by downgrading several government-related entities, saying there is increased uncertainty in getting the state to support distressed companies.

The capital of Abu Dhabi threw in a $10-billion lifeline to Dubai World, but the conglomerate still has to get the nod of its creditors for a restructuring of its debts. This has kept both domestic and foreign funds, out of the market, as they wait for more clarity about Dubai World’s debt issues.

Dubai’s index erased most of its gains this year as a result, and is just about six per cent higher since the start of 2009, while Abu Dhabi’s gains are at 12 per cent. “Where we are now is at levels where there is room for upside from full year results,” said EFG-Hermes’ Wakeman.

“Gulf markets have been big underperformers this year following December’s correction, and as such, will attract international investor attention in the New Year. Any talk that foreign buyers will stay away is fine in theory, but the reality is that investors have a remarkably short memory when they are missing the upside and chasing performance for their funds,” he added.

· rocel@khaleejtimes.com