Steady oil lifts UAE indices despite low volumes
Published: 14:51 September 8, 2015
Dubai: Stocks in the UAE closed a tad higher despite low volumes, helped by steady crude oil prices but analysts still painted a bearish outlook for equities ahead of an anticipated interest rate in the United States expected later this month.
Both the Dubai and Abu Dhabi indexes closed in positive territory, with the Dubai Financial Market General Index (DFMGI) up 0.47 per cent higher at 3,575.39 while the Abu Dhabi Securities Index (ADX) rose 0.61 per cent to close at 4,413.63.
However, the low volumes manifested themselves in the form of Dh311 million worth of trades in Dubai on Tuesday as compared to more than Dh1 billion just a few months ago.
Osama Al Ashri, a member of British organisation, the Society of Technical Analysts, warned on the complexities accompanying low volumes.
“Low volume in this area means it’s a risky market,” he said. “[The Dubai index may fall further, if it breaches support level of 3,389.”
He added that the Abu Dhabi index could fall to 4,190 in a few weeks.
Amlak Finance closed 2.90 per cent higher at Dh2.13, while Damac Properties closed 1.13 per cent higher at Dh3.59. Emaar Properties ended the day’s trade 1.75 per cent higher at Dh6.40 while Arabtec closed 0.52 per cent higher at Dh1.93.
Given the bearish outlook on the share in the medium- to long-term, Menacorp, in a note to its clients, advised traders to remain neutral and look to reposition near a strong support zone only after clear bullish reversal signs in Arabtec.
Out of a total of 31 stocks traded on the exchange, the shares of 21 firms rose while those of seven others fell.
Al Ashri said “[investors] should wait for better bargains, as I don’t recommend to buy now and advise to hold.
On Aldar Properties, he added that the stock “may see a new low, so I advise to hold.”
In Abu Dhabi, etisalat ended half a per cent higher at Dh13.75 while Dana Gas closed steady at Dh0.52. Aldar Properties closed flat at Dh2.29.
“The trend is strongly bearish at the time being as marked by the fall below many daily strong support zones,” Menacorp’s note said. “Long term bullish scenarios has been postponed for now and traders should be holding no long positions.”
In Saudi Arabia, the Tadawul index was 0.28 per cent higher at 7,504.51 but Al Ashri forecast a new low of 6,500 on the index.
The Qatar Exchange index closed 0.98 per cent higher at 11,430.47 after its finance minister said the state finances were healthy and required no adjustments —a marked difference from cost-cutting measures adopted by other Gulf states.
Elsewhere in the Gulf region, the Kuwait Stock Exchange index closed 0.12 per cent higher at 5,716.70 while the Bahrain Bourse All Share index closed 0.08 per cent lower at 1,292.67.