Global market weakness, oil put brakes on UAE equities rally

Traders will closely watch Emaar Malls scrip after the company posted 22.6% rise in 2015 net profit

Published: 17:40 February 7, 2016

Siddesh SureshMayenkarStaff Reporter

Dubai: UAE stocks snapped a two-day winning streak yesterday, as weakness in the global markets and oil persisted, with traders eyeing results from real estate firms for direction.

Global stock markets slumped while the US dollar rallied on Friday after a key US jobs report painted a mixed picture of the labour market.

Brent crude ended more than a per cent below the keenly watched $35 (Dh128.55) per barrel mark.

“Sentiment turned negative on back of global markets and oil weakness, we have been mainly up last week on back of Emaar strength and after the news of the major tower was announced it was time to book profits on the name and the market,” said Hesham Khairy, head of institutional trading at Menacorp.

The Dubai Financial Market General Index (DFMGI) closed 0.69 per cent lower at 3,037.33, after trading in the range of 3,029.08-3,084.20.

The index gained nearly 3 per cent in the last two sessions of the week.

In stock-specific action, Amlak Finance ended more than 2 per cent lower at Dh1.27, while Damac Properties ended 1.64 per cent lower at Dh2.40. Arabtec ended 1.71 per cent lower at Dh1.15 while Dubai Investments closed more than 2 per cent lower at Dh1.71.

Out of 31 stocks traded on the exchange, the shares of 20 companies fell, while those of seven rose.

Eye on results

Shares worth Dh240 million were traded on the exchange, around half of last week’s volumes. Traders will closely watch the share prices of Emaar Properties and the Emaar Malls Group (EMG) after the latter posted a 22.6 per cent increase in the 2015 net profit.

Emaar Properties, which was the most actively traded stock in Dubai, ended nearly 1 per cent higher at Dh5.45.

“[The] results of real estate will start with Arabtec, with estimates pointing to very weak numbers, which isn’t going to help lift sentiment. I don’t think global or regional markets will break [the] current correlation with oil and [I] expect it to continue till we see a bottoming or lower volatility in oil,” Khairy said.

In Abu Dhabi, the general index closed 0.91 per cent lower at 4,103.27. The index may hit a resistance level of 4,207 later in the week, according to Osama Al Ashri, a member of British organisation, Society of Technical Analysts.

In stock-specific action, Dana Gas closed 2.22 per cent higher at Dh0.46, while Eshraq Properties closed 1.75 per cent higher at Dh0.58.

Aldar Properties ended the day’s trade 1.5 per cent lower at Dh2.36.

Resistance level

Aldar Properties may hit a resistance level of Dh2.51 later this week, said Al Ashri.

RAK Properties closed 2.04 per cent lower at Dh0.48. Out of a total of 27 stocks traded on the exchange, the shares of 15 companies fell while those of eight others rose.

Elsewhere in the Gulf, the Qatar Exchange index closed 0.65 per cent lower at 9,620.57, while the Muscat Securities MSM 30 index ended the day’s trading session 1.11 per cent higher at 5,298.60.

The Qatar index may hit a new target of 9,795 later in the week, Al Ashri said.

The Kuwait Exchange Index closed 0.16 per cent higher at 5,206.83 while the Bahrain Bourse All Share Index closed 0.03 per cent lower at 1,176.82.

The Kuwait index could hit a resistance level of 5,321 later this week, Al Ashri added.

Fact box: More pain on Saudi bourse

Saudi Arabia’s Tadawul All Share Index may extend its southward journey in the coming sessions, analysts have said.

“The Tadawul index witnessed resistance at around 6,000 and hasn’t been able to break it for the past six sessions. [It’s] time to resume its downtrend and at least test recent lows around the 5,400” Hesham Khairy, head of institutional trading at Menacorp, said.

On Sunday, the Tadawul was down 1.58 per cent at 5,896.49, leading the losses in the region. Saudi Basic Industries closed nearly 1 per cent at 66.75 Saudi riyals.

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