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UAE Stocks Wait for Directions; DFM, ADX Edge Up

DUBAI - UAE shares advanced on Monday in thin trade with property stocks steering the Dubai bourse while banks buoyed Abu Dhabi.

The Dubai Financial Market main index finished 1.08 per cent higher at 1,504.78 while the Abu Dhabi Securities Exchange benchmark index edged up 0.35 per cent to 2,196.33.

“Markets may be higher but the lack of volume effectively means the market is in limbo waiting for direction,” said Matthew Wakeman, managing director of cash and equity linked trading at EFG-Hermes.

“What we are seeing are some buying in select stocks, those that have attractive price valuations after recent losses,” said Ali Khan, managing director of Arqaam Capital.

Dubai-based Deyaar Development surged 8.3 per cent in early trade after posting a hefty 59 per cent increase in its fourth-quarter net profits, but profit-taking towards the close trimmed gains to 6.25 per cent to Dh0.51.

Deyaar said Sunday its fourth quarter net income reached Dh343 million on strong sales of residential and office units and on revaluation gains.

Dubai Islamic Bank which partially owns Deyaar, also rose 2.99 percent to Dh1.72.

Arabtec Holding, the country’s largest construction company building the world’s tallest building in Dubai, is steadily clawing back from sharp losses last week, climbing for a second day on follow-through buying to finish 2.77 per cent higher at Dh1.11.

Index heavyweight Emaar Properties, the Middle East’s biggest property developer advanced 2.13 per cent to Dh1.91.

Banks rose 2.19 percent in Abu Dhabi led by the National Bank of Abu Dhabi which climbed 9.04 per cent to Dh 8.0 and the Abu Dhabi Commercial Bank advanced 5.76 per cent to Dh1.49.

“Expectations of lower earnings are in the price across the board so some speculative trading is taking place ahead of announcements,” said Wakeman.

The UAE central bank ordered banks in a notice to put off reporting 2008 results and allocate provisions for losses pending its special lending review.

Banks are expected to be one of the hardest hit sectors with lower incomes anticipated due to the global financial crisis and where most in the region have high exposures to the slumping property market.

Property stocks in Abu Dhabi took a different route, declining 4.35 percent.

“There seems to be an ongoing seller in Aldar and that’s prompting buyers to sit lower and wait for the stock to come to them. Sorouh is under pressure as a consequence of selling in the sector, but has outperformed Aldar month to date,” said Wakeman.

Aldar Properties, the emirates’ top property company, dropped 5.24 percent to Dh2.33.

Second-ranked Sorouh Real Estate fell 4.10 per cent to Dh2.56.

Trading will continue to be range-bound until more corporate results come out, said Wakeman.

“The markets are effectively coiled springs at these levels, any perceived outperformance on earnings, dividends or guidance could give us a sharp short-term rally. Likewise, any disappointment will send us scrambling for new support levels.”


rocel@khaleejtimes.com