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Dubai Rebounds from a Five-day Loss, Abu Dhabi Continues to Slide

DUBAI - Shares in Dubai snapped out of a five-day losing streak to slightly rebound on Monday, but Abu Dhabi declined for a third trading day.

The main index of the Dubai Financial Market was unable to go back to the psychologically critical level of 2,000, inching up by a marginal 0.5 per cent at 1,953.47. Trading focused on select stocks, led by Deyaar Development which rose by 3.7 per cent to Dh0.84. Union Properties went up by 3 per cent to Dh1.03. Index heavyweight Emaar Properties climbed by 2 per cent to Dh3.51. The Middle East’s biggest property disclosed to the Dubai bourse that it expected revenue from its malls and retail business this year to double to as much as Dh1 billion, boosted by its new malls. The benchmark index of the Abu Dhabi Securities Exchange slipped by 0.2 per cent to 2,745.19.

“The anticipated third wave of rally is failing to take shape as the bulls and the bears are in this tug of war. The bulls latch on few positive news to push the index back to the 2,000 level, while the bears still want to consolidate because they see nothing to justify another rally. We can expect this camp to be split until there is a big catalyst to take us to a clear direction,” said Haissam Arabi, chief executive officer and fund manager of Gulfmena Alternative Investments.

In the absence of compelling catalysts and no firm technical fundamentals to steer the markets, investors are likely to stay on the fence ahead of the corporate earnings reporting season, said Arabi.

“Investors want something more substantial to help them determine the ultimate direction of the market. Other investors are also unwilling to make firm commitments especially with the summer up ahead.”

Arabtec Holding, the country’s biggest construction company helped to pull up the Dubai index, climbing by 1.4 per cent to Dh2.84. Al Mal Capital retained its “market perform” rating on Arabtec, with a target price of Dh3.38.

“Although we expect results to show some top line improvement quarter-on-quarter as Arabtec begins work in Saudi and Qatar, we expect the margins to be pressured in the near term. In addition, the downturn has not yet passed, and the impact is likely to be felt on the financial performance, especially on a year-on-year basis.”

Al Mal also said the uncertainty surrounding its Russia project and the lack of visibility about outstanding receivables could add pressure on the stock in the near term.

Dubai Islamic Bank added 1.1 per cent to Dh2.63. The bank announced the resignation on Monday of its board member, Nasser Bin Hassan Al-Shaikh, a day after he stepped down as chairman of Deyaar Development, which is partly owned by the bank. Al Shaikh also gave up his post as director of Dubai’s Department of Finance on May 18.

In Abu Dhabi, Waha Capital PJSC, jumped by 6 per cent to Dh0.88. The investment company said it agreed to buy 50 per cent of AerVenture, a unit of Aercap Holdings NV, extending its presence in the aircraft leasing industry.

Aldar Properties, the emirate’s biggest property company, inched up by half a per cent to Dh4.10 after falling on Monday by 5.6 per cent. The company said it may incorporate three of its units at its board meeting on June 24.

Pacing decliners in Abu Dhabi were Emirates Telecommunications Corp. the UAE’s biggest telecommunications company which fell by 1.4 per cent to Dh10.30.

rocel@khaleejtimes.com