Dubai index jumps on oil output freeze agreement

Dubai index leads regional gains, as oil breaches $35 per barrel again

Published: 17:30 February 16, 2016

Siddesh Suresh Mayenkar, Staff Reporter

Dubai: Dubai index led the gains in regional markets after the oil ministers of Saudi Arabia and Russia agreed to freeze output in a meeting,

The Dubai Financial Market General Index closed 2.03 per cent higher at 3,064.84, after trading in the range of 3,064.84-3,074.10.

“The rally was driven by hopes of a positive outcome at the meeting of Opec oil ministers and representatives from Russia in Doha on Tuesday, said Sanyalaksna Manibhandu, Director — Head of Research at National Bank of Abu Dhabi Securities.

Oil prices jumped to $35.55 per barrel after the news about the secret meeting but later pared gains to trade below $34 on concerns that Iran may reject the deal.

In stock-specific action, Emaar Properties closed more than 3 per cent to end at Dh5.66, while Gulf Finance House closed more than 2 per cent higher at Dh0.579.

“Long term traders should remain neutral with the aim to reposition only after stronger trending characteristics appear on long term charts. The break below previous medium term support at 5.70 has shown further weakness in the share and points towards a downwards continuation,” Menacorp said in a note to its clients.

Air Arabia also jumped 3.28 per cent to end at Dh1.26, while Dubai Parks ended 3 per cent higher at Dh1.18. Damac Properties ended 2.46 per cent higher at Dh2.50.

Out of a total of 34 stocks traded on the exchange, shares of 24 firms rose, while 8 others fell.

In Abu Dhabi, the general index closed 0.80 per cent higher at 4,140.22.

“Long and medium term traders should remain outside of the market while bearish scenarios continue to develop. In the medium term the market remains strongly bearish, with bearish momentum expected to return,” Menacorp added in a note.

Dana Gas ended more than 2 per cent lower at Dh0.48, while Eshraq Properties ended 1.5 per cent higher at Dh0.61. Aldar Properties closed 1.69 per cent higher at Dh2.40.

The long term trend is strongly bearish 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 descend before considering new positions in Aldar Properties,” Menacorp said.

Methaq Takaful Insurance ended 3.17 per cent lower at Dh0.61. Out of a total of 29 stocks, shares of 10 firms each rose and fell, while the rest remained steady.

Side-wide action:

“Generally speaking, results for the fourth quarter have come in ahead of expectations. In the very near term, I expect traders to sell on fact. After a period of side-wide inaction, traders will likely trade ahead of stocks going ex-dividend,” Manibhandu said. Most of the companies have agreed to pay dividend yield of 7-9 per cent, above analysts’ expectations.

In other markets, the Muscat Securities Market’s MSM 30 index closed 0.57 per cent higher at 5,380.03, while Kuwait Stock Exchange index closed 0.08 per cent lower at 5,134.96.

Bahrain ended 0.20 per cent higher at 1,169.21. Egypt’s main benchmark ended up 1.5 per cent with Orascom Telecom (OTMT), the most traded stock, adding 3.6 per cent after gaining 3.7 per cent on Monday. Beltone Financial soared 9.9 per cent, heading for a fourth straight trading day of strong gains.

Fact Box

Qatar index may lag compared to its regional peers, an analyst said.

Qatar exchange index closed 0.16 per cent higher at 9,873.13. “Qatar is likely to lag other GCC markets under coverage and put on sharp spurts of performance when it catches up,” Manibhandu said, adding “the Tadawul is likely to be more driven by speculation on production cuts than other MENA equity markets.”

Saudi Arabia’s Tadawul index closed 0.86 per cent higher at 5,739.98, easing from its intra-day high of 5,848.24. Saudi Basic Industries ended more than 1.5 per cent higher at 67.75 Saudi Riyals.

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