Ignoring tumbling oil, Abu Dhabi index jumps 1%
Published: 18:11 February 10, 2016
Dubai: Ignoring an 8 per cent fall in crude oil prices, the Abu Dhabi index jumped more than a per cent on Wednesday on buying activity in specific banking stocks.
The Abu Dhabi Securities General index closed 1.05 per cent higher at 4,104.53, and the index may gain further in the short term.
Abu Dhabi may hit a new high of 4,244 this week, Osama Al Ashri, member of British organisation, Society of Technical Analysts.
In stock specific action, Rak Properties jumped more than 14 per cent in trade after the company posted strong results. Abu Dhabi Commercial Bank closed flat at Dh6.30, while Aldar Properties fell more than a per cent to end at Dh2.37.
The downtrend on medium term chart has been breached in Aldar Properties, so the stock may see a new high of Dh2.57. First Gulf Bank may hit a new high of Dh12.25, said Al Ashri.
The downtrend has been breached on medium term chart in Rak Properties. The stock may hit resistance level of Dh0.61 later this week, said Al Ashri, adding Eshraq may hit a new high of Dh0.69 by next week. Out of a total of 35 stocks traded on the exchange, shares of 14 firms rose.
In Dubai, the general index ended 0.15 per cent lower at 3,060, with the downside limited due to buying on property counters.
“The market holding is up well above the 3,000 mainly on back of Emaar Properties and Damac buying activity, lot of speculation on strong results coming out from both companies, global markets have been heavily sold lately. There are showing resigns of another relief rally, this could take place tonight after Yellen’s speech which would help lift sentiment and could take our markets higher,” said Hisham Khairy, head of institutional trading, Menacorp.
Emaar Properties closed 1.25 per cent lower at Dh5.51, while Damac Properties closed 0.38 per cent lower at Dh2.60. Deyaar Properties closed 5 per cent higher at Dh0.50. Out of a total of 34, shares of 18 firms rose, ten fell and six remained flat.
“Overall picture remains negative globally and locally and all these rallies are just short term and the main down trend will resume anytime in the future, only thing that would change that is oil bottoming and charts aren’t showing anything taking place yet,” said Khairy.
Oil, which has been driving the equity markets in the region, has fallen more than 25 per cent this year amid a supply glut and sagging demand.
In Saudi Arabia’s Tadawul index ended 0.69 per cent lower at 5,832.92. Some banking stocks looks bullish currently.
“Still banking sector names like Riyad Bank, Samba Financial Group, in particular Riyad Bank which offers 6 per cent dividend yield trades at 0.8 per cent price to book, there are no concerns that bank will be impacted if government withdraws its deposits cause according to SAMA there hasn’t been any significant changes, stock has been forming a bottom lately around the 11 Saudi Riyals and with a break of the 12 Saudi Riyals a reversal will be confirmed,” Khairy said.
Riyad Bank closed 11.10 Saudi Riyals, down 0.45 per cent.
In the wider Middle East, Egypt’s index closed nearly 1 per cent higher due to recovery in real estate stocks. The index closed at 6,062.65.