(MENAFN- Khaleej Times) Banks and financing companies dominated corporate profits of UAE-listed companies, which jumped by around 15 per cent to more than Dh25 billion during the first half of the year compared to same period in 2012, according to data from the UAE's bourses.
Financial institutions accounted for more than 55 per cent of the combined earnings of over 70 companies and declared more than Dh14 billion profits for the January-to-June period.
Banks and financing firms were one of the best performers in the first half at the bourses with a more-than-20 per cent increase in profits. Real estate firms declared even better results with a 26 per cent rise over last year.
Strong financial results attracted strong rallies at UAE bourses during July as the Dubai Financial Market General Index jumped by 16.5 per cent and the Abu Dhabi Securities Exchange index climbed 8.3 per cent. Year-to-date gains on the Dubai and Abu Dhabi indices reached 59.5 per cent and 46.2 per cent. respectively.
The DFM also emerged as a leading capital market among GCC countries during July in terms of percentage gain in its index, according to Global Research's report for the month.
The combined market capitalisation of the DFM and the ADX as of July 31 reached more than Dh560 billion.
Last month, the DFM index advanced to 2,588.53 points after declining 6.1 per cent month-on-month in June. The drop in that month provided investors with an attractive entry point. In contrast to the index's performance, trading activity continued to decline for the second consecutive month in July.
The MSCI's reclassification of the UAE to emerging market status kept investor sentiments upbeat. Market growth was driven by sector heavyweights banking, real estate, construction and services.
The ADX, after ending almost flat in June, bounced back in July and jumped to 3,847.43 points by the end of last month. The key driver for the market was the expectation of strong corporate earnings in the second quarter. The market was primarily driven by the banking and real estate sectors as a result of an improving business environment in the UAE. Construction activity remains on an uptrend, while liquidity has been increasing.
The first post-Eid session of both capital markets on Sunday witnessed slow activity and a decline in respective indices. The DFM general index suffered a 6.5-point loss to 2,667.65, while Abu Dhabi declined by 30 points to 3,899.34.
During the first half of the year, the DFM General Index rose 37 per cent to close at 2,222.6 points, compared to 1,622.5 points in the second half of 2012. At the sectoral level, indices of seven out of the nine sectors represented on the DFM ended the month in the green, with the telecommunications sector increasing the most by 66.2 per cent, followed by the financial and investment services sector by 58.2 per cent, and the services sector by 47 per cent. The insurance sector was down 15.8 per cent.
The value of stocks bought by institutional investors in the first half of 2013 reached Dh14.9 billion comprising 25.2 per cent of the total traded value.
The value of stocks sold by institutional investors during the same period reached Dh13.9 billion, which constitutes 23.6 per cent of the total value traded. The DFM's net institutional investment in-flow amounted to Dh958.3 million.
Sector-wise, the real estate and construction sector ranked first in terms of the traded value to reach Dh23.5 billion, equating to 39.9 per cent of the total traded value in the market.
The banking sector ranked second with Dh13.8 billion (23.4 per cent), followed by financial and investment services with Dh10.2 billion (17.3 per cent), services with Dh4.1 billion (seven per cent), transportation with Dh3.4 billion (5.8 per cent), telecommunications with Dh2.5 million (4.2 per cent) and insurance with Dh1.4 billion (2.3 per cent). The other sectors shared the rest of trading values.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.