Abu Dhabi, Dubai indices ease from Sunday’s high

Apart from global factors, investors are looking to Q4 results for direction

Published: 17:19 January 25, 2016

Siddesh Suresh Mayenkar, Staff Reporter

Dubai: After a relief rally on Sunday, the Abu Dhabi and Dubai indices eased at close, taking negative leads from oil.

The Abu Dhabi Securities Exchange General Index closed 0.63 per cent lower at 3,814.85, after gaining nearly 3 per cent in the previous session.

“We had a nice bounce on Sunday but today there was no further news that was positive, so there was profit-taking and crude also went lower,” Sanyalaksna Manibhandu, manager of research at National Bank of Abu Dhabi Securities, told Gulf News. “Some of the investors have taken [a] profit, but that money won’t come back in unless crude sustains [its trajectory].”

After a 10 per cent recovery, Brent crude fell more than 4 per cent on Monday, resuming its decline after the biggest two-day rally in more than seven years as concerns persist over US stockpiles, production from Saudi Arabia and Russia, as well as Iran’s return to the market following the end of sanctions

In stock-specific action, Dana Gas ended more than 2 per cent lower at Dh0.41, while First Gulf Bank (FGB) also ended more than 2 per cent lower at Dh10.25.

Eshraq Properties closed at Dh0.43, down 2.27 per cent.

“The long-term trend for Aldar is strongly bearish at the time being, as marked by the fall below many daily strong support zones. Long-term bullish scenarios have been postponed for now and traders should be waiting for fatigue in this descent before considering new positions in this share,” the Menacorp note added.

Out of a total of 25 stocks traded on the exchange, the shares of 18 companies fell, while those of four gained.

Banking results

“The other thing that people are looking at are results. UNB [Union National Bank] results were a miss. We can see [the] banking sector opening weak on Monday due to lower-than-expected banking results,” Manibhandu said, adding that “UNB not only came out with a miss but they also cut dividends.”

“Now that we are in the middle of the results season, investors would increasingly look at internal leads. Anything that the management says about 2016 would be taken as reasons to price in the stock,” Manibhandu said.

UNB proposed a cash dividend of Dh0.20 per share for 2015 even as it posted a 55 per cent drop in fourth-quarter net profit.

In Dubai, the general index also ended 1.93 per cent lower at 2,703.90, after gaining as much as 6 per cent in trade.

“With the medium- and long-term charts having strengthened the negative picture with the latest attempt to beak to a new 52-week low on Dubai index, traders are advised to remain neutral and wait for a stronger indication of a bottom in the market before targeting a stronger correction,” Menacorp said in a note to clients.

Arabtec ended 4.96 per cent lower at Dh1.15 while Emaar Properties closed 2.76 per cent down at Dh4.58. Amlak Finance closed trade nearly 6 per cent lower at Dh1.15.

Dubai Islamic Bank ended more than 2 per cent lower at Dh5.15.

“The downward break of the Dh5.50 level for Emaar Properties has shown further weakness in the share directing it towards the Dh4 level,” Menacorp said in a note.

Out of a total of 34 stocks traded on the exchange, the shares of 26 firms fell, while those of four rose.

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