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Equities End Flat in 2009

The main index of the Dubai Financial Market inched down by a marginal 0.4 per cent to 1,803.58 points, and capped the year with a gain of 10.2 per cent. The benchmark index of the Abu Dhabi Securities Exchange barely changed at 2,743.61 points, but ended a turbulent year on a positive note with gains of 14.8 per cent.

“There was just no interest to trade this week as investors, especially foreign fund managers, are already on holiday. Some have closed their portfolios earlier in the week,” said Hesham Bakry, institutional sales manager at HC Securities.

The year’s strongest performers in Dubai were index heavyweight Emaar Properties which ended at Dh3.86 to gain 71 per cent from 2008. Arabtec Holding, the country’s largest construction company, Arabtec Holding, recovered from a low of Dh0.76 in February to finish at Dh2.68, and moved up by 18.5 per cent in 2009.

Contractor and engineering company Drake & Scull International was steady at Dh0.90. The stock rose by 22 per cent since it listed on March 16. Logistics provider Aramex was one of the biggest gainers, its shares at Dh1.57, rose by a hefty 98.7 per cent from Dh0.79 a year earlier.

Trading in UAE shares was lacklustre in the first quarter, as investors worried about the impact of the global economic downturn. Dubai and Abu Dhabi bourses moved in line with equities worldwide in the second and third quarters, as the steady rise in oil prices, a slew of fiscal stimulus by goverments, and sputtering signs of a turnaround, sparked an eight-month rally in equities around the world.

Dubai shares were up by 27.9 per cent in early November, and were about to set the stage for a stronger yearend rally, but the Dubai World surprise in November 25, saw shares in the emirate slipping by 19 per cent in nearly three weeks.

Dubai World stunned markets when it sought from its lenders, a debt standstill up to May 30, and said it was restructuring some of its units.

The markets gradually climbed after Abu Dhabi threw a $10 billion lifeline to Dubai on December 14, to help pay for a $4.1 billion Sukuk of Nakheel PJSC, the property arm of Dubai World.

Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG Hermes, said the selloff in Dubai was warranted.

“The uncertainty meant that the risk had to be re-evaluated, and exposure, managed accordingly. Abu Dhabi however, was oversold — as investors didn’t differentiate between the two markets.”

Investment bank Shuaa Capital, said earlier this week that investors naturally, see more upside for Abu Dhabi shares in 2010.

Abu Dhabi-based First Gulf Bank stood out in 2009, chalking up gains of 83.5 per cent to Dh16.15 compared to last year’s ending of Dh8.80.

Emirates Foodstuff & Mineral Water Company PJSC or Agthia, soared by nearly 70 per cent in 2009, ending at Dh1.83.

rocel@khaleejtimes.com