Small cap stocks in focus as UAE indices face profit-taking

Analysts have mixed outlook on local indices, saying leads would come from global markets and oil

Published: 18:24 February 25, 2016

Siddesh Suresh Mayenkar, Staff Reporter

Dubai: Gulf Finance House, Amlak, Eshraq Properties among others were in focus from retail traders as UAE indices ended a tad lower on profit-taking.

The Dubai Financial Market General Index closed 0.42 per cent lower at 3,124.07, after trading in the range of 3,124.07-3,156.71.

Gulf Finance House ended more than 1 per cent lower at Dh0.674, becoming the second most-active stock in trade. Amlak Finance ended 1.46 per cent lower at Dh1.35.

“In Dubai, retail investors has been cornering the market. They are looking at small caps stocks like Eshraq Properties, Deyyar Properties, Gulf Finance House and others,” said Hisham Khairy, Head of Institutional Trading, Menacorp. “In the blue chips, Dubai Islamic Bank, Emaar Properties is showing strength on the charts,” Khairy added.

Dubai Investments ended nearly 1 per cent higher at Dh1.89.

The stock managed to hold over Dh1.86 levels, and if this support remains intact, shall target Dh2.03 and then Dh2.15 in the short term. Traders may use Dh1.85 as the stop loss on the buy positions, National Bank of Abu Dhabi Securities said in a note.

Emaar Properties closed 1.23 per cent lower at Dh5.60. Damac Properties closed nearly 1 per cent higher at Dh2.61. Dubai Islamic Bank closed more than 1 per cent higher at Dh6.24.

Gulf Finance House is still trading in medium risk and may hit a new high of resistance level of Dh0.8. Emaar Properties may witness consolidation between the range of Dh5.25-5.8. Amlak Finance has strong resistance at Dh1.51, Osama Al Ashri, member of British organisation, Society of Technical Analysts said.

In Dubai, out of a total of 36 stocks traded on the exchange, shares of 15 firms rose, while other 18 fell.

Mixed outlook

“The outlook would depend on global markets and how oil would trade. The short-term rally is sustainable. We might see a breach on the upside,” said Khairy. “We might see an upside until 3,500 on Dubai index, but would reverse after reaching that resistance level.”

However Al Ashri sees downside in Dubai index. “If Dubai index breaches support level of 2,975, there could more downside risk, and the first target would be support level 2,744,” Al Ashri said.

In Abu Dhabi, the general index ended 0.54 per cent lower at 4,259.22. Abu Dhabi Securities Exchange general index is still trading in high risk area, and “if it breaches support level of 4,067, the risk would start again and I advise to put a stop loss,” said Al Ashri.

Abu Dhabi Commercial Bank closed 1.45 per cent lower at Dh6.78. Aldar Properties closed 0.41 per cent lower at Dh2.45.

Eshraq Properties closed 1.37 per cent lower at Dh0.72. Abu Dhabi Commercial Bank may go down to support level of Dh5.89 after it goes ex-dividend, said Al Ashri, adding Aldar Properties may consolidate in the range of Dh2.2-2.69. Aldar Properties closed less than a per cent lower at Dh2.44.

RAK Properties closed more than 1.5 per cent lower at Dh0.63. Out of a total of 23 stocks traded on the exchange, shares of 10 firms rose, while other 11 fell.

Elsewhere in the Gulf, Muscat Securities MSM 30 index closed 0.29 per cent lower at 5,388.34, while Kuwait Stock Exchange index closed 0.16 per cent higher at 5,174.69. Bahrain exchange index closed 0.58 per cent lower at 1,182.30.

In the wider Middle East, Egyptian EGX 30 price return index closed 0.41 per cent higher at 6,079.13.

Fact Box

Qatar index may fall further, analysts said.

“I recommend to sell Qatar index as I see it going down to support level of 9,276, said Al Ashri, On Thursday, the Qatar Exchange index closed 0.71 per cent lower at 9,847.36.

“If TASI breaches support level of 5,710, I expect new low of 5,178 by next month,” said Al Ashri. Saudi Arabia’s Tadawul index closed 0.57 per cent lower at 5,975.94.

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