Dubai index post best weekly performance in 2016

Despite this week’s strong show, the overall trend is still negative

Published: 19:03 January 28, 2016

Siddesh Suresh Mayenkar, Staff Reporter

Dubai: The Dubai index jumped nearly 4 per cent on Thursday, posting the best weekly performance so far in the year, taking a respite from the continued recovery in crude oil prices.

“The current short-term trend could continue mainly on back of oil’s technical rebound, which is expected to continue another 10 per cent and a global market rebound, which is expected to continue for the near-term as well,” Hisham Khairy, Head of Institutional Trading at Menacorp, told Gulf News.

The Dubai Financial Market General Index closed 3.78 per cent higher at 2,857.24, with most of the stocks ending in the green.

Dubai Investments was the most active stock in trade, ending the session 8.5 per cent higher at Dh1.66. Emaar Properties closed nearly 5 per cent higher at Dh4.89.

Brent futures were holding above $33, having risen 4 per cent on Wednesday after Russian officials said they should talk to Saudi Arabia and other Opec countries about output cuts to bolster prices.

“Long-term traders should remain neutral in Emaar Properties with the aim to reposition only after stronger trending characteristics appear on long-term charts,” Menacorp said in a note to clients.

Gulf Finance House also ended 5 per cent higher at Dh0.554, while Arabtec and Dubai Islamic Bank (DIB) both ended 3 per cent higher. Gulf Navigation ended 5 per cent higher at Dh0.758.

“Long-term traders should wait for stronger trending characteristics before preparing to acquire new bullish positions in DIB with the market continuing the show weak signals,” the Menacorp note added.

The Abu Dhabi index ended 2.16 per cent higher at 3,910.44. Aldar Properties closed 5.77 per cent higher at Dh2.20. “The long-term trend is strongly bearish in Aldar Properties. Long-term bullish scenarios have been postponed for now and traders should be waiting for fatigue in this descend before considering new positions in this share,” the Menacorp note said.

Eshraq Properties closed more than 13 per cent higher at Dh0.50, while Dana Gas ended at Dh0.44, up 4.76 per cent. Etisalat ended 2.5 per cent higher at Dh16.40.

Out of a total of 26 stocks traded on the exchange, shares of 21 firms rose, while other 2 firms fell.

Trend still down:

But the trend is still negative, warns analysts. “The downtrend will resume once we finish this short-term bounce, Oil is expected to print new lows or at least test the recent $27 again and global markets just started a downtrend at the beginning of this year. Expect at least 30 per cent downward pressure, in term of results. So far, only DIB has posted strong numbers, rest of the banks have so far missed, which adds to the negative sentiment. This will push the market lower once we are done with this relief rally,” said Khairy.

Another technical analyst with Menacorp advised traders to remain neutral and wait for an indication of a bottom in the market before targeting a stronger correction on the Dubai index.

Other Gulf markets also displayed strong sentiment on Thursday.

Muscat Securities MSM 30 index closed 1.26 per cent higher at 5,016.51, while the Kuwait Stock Exchange index also ended 0.83 per cent higher at 5,010.39,

Bahrain closed 1.13 per cent higher at 1,171.63.

In the wider Middle East, Egyptian EGX index closed 0.44 per cent higher at 5,986.78.

Fact Box

Saudi Arabia’s Tadawul index rose more than 3 per cent on the back of strong oil. Saudi Basic Industries, the largest petrochemical stock by market value, rose 2.6 percent.

“For Saudi, the story is clear and its all about oil, all regional markets would move together,” Menacorp’s Khairy said. Most of the investors resorted to bargain hunting in select stocks after heavy declines witnessed earlier in the month.

Qatar Exchange index also ended higher. The index closed 3.26 per cent higher at 9,272.01.

 

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