Oil at 2008-low jolts UAE equities with Saudi, Qatar

The Dubai index falls to a low last seen in November 2014

Published: 17:09 December 13, 2015

Siddesh Suresh Mayenkar, Staff Reporter

Dubai: The Dubai index joined the sell-off along with other equity markets in the Gulf as oil prices, which tumbled to its lowest level in 2008, kept the sentiment depressed.

The Dubai Financial Market General Index closed 2.10 per cent lower at 2,882.80, after falling to a low of 2,851.24, a level last seen in November 2014.

“We were surprised by the sharp low opening in trade (on Sunday). We are now in a situation where the traders are driven by technicals than fundamentals,” said Sanyalaksna Manibhandu, Manager of Research, National Bank of Abu Dhabi Securities.

“Fundamentals is that crude is slumping, and that’s bad for liquidity. Nobody really knows where crude will stabilise,” said Manibhandu. Crude has been under pressure shedding more than half of its value since last year on a supply glut.

Internationally too, markets were under pressure ahead of a rate hike from the US.

“Globally, markets were jolted by selling pressures amid rising worries that the oil slump, the commodities drop, and a possible rate hike by the US Fed may fuel a further slowdown,” Talal Touqan, Head of Research and Advisory at Al Ramz Capital said.

In stock specific action, all heavy weights like Emaar, Arabtec, Dubai Islamic Bank among others faced heavy selling pressure in the morning, but ended off their early lows.

Emaar Properties closed 0.39 per cent lower at Dh5.13, while Dubai Islamic Bank closed more than 3 per cent lower at Dh5.42. “Emaar Properties has found resistance below 6.24 and signalling towards a shift in momentum to bearish and directing the market to new lows,” Menacorp said in a note to clients.

Arabtec closed 3.67 per cent lower at Dh0.945. Amlak Finance closed 5.04 per cent lower at Dh1.13. Damac Properties closed 2.83 per cent lower at Dh2.06.

DIC ended more than 3 per cent lower at Dh1.86. Out of a total of 31 stocks traded on the exchange, shares of 28 firms fell, while shares of 2 firms rose.

Volatility:

“People are now looking for low levels, technicals are now pointing to 2,750 levels,” Manibhandu said, adding: “People should be able to ride the volatility, and if you are going to look at dividends in early 2016, you should be prepared to take some unrealised loss in the very short term.”

Even the Abu Dhabi stocks were not spared on Sunday’s sell-off. The Abu Dhabi Securities Exchange General Index closed more than 2 per cent lower at 4,000.71.

Dana Gas closed 2.65 per cent lower at Dh2.20, while Waha Capital closed more than 3 per cent lower at Dh2.07. RAK Properties closed more than 2 per cent lower at Dh0.46.

“The long term continues to be in a strong downtrend, currently supported by the 1.90 low that previously provided support in December 2014,” Menacorp said on Aldar Properties. The stock ended more than 2.5 per cent lower at Dh2.20.

Out of a total of 26 firms traded on the exchange, shares of 18 firms fell, while shares of other 6 firms rose.

Elsewhere in the Gulf, Saudi Arabia’s Tadawul index closed 2.99 per cent lower at 6,741.03, while Qatar Exchange index ended 3.71 per cent lower at 9,643.65. Muscat MSM 30 index closed 0.66 per cent lower at 5,414.99.

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