(MENAFN- Khaleej Times) UAE shares were mixed on Tuesday, with Dubai bouncing back to positive terrain as firmer oil prices encouraged buying, but profit-takers continued to pull down Abu Dhabi market.
Property and select penny stocks bouyed the Dubai Financial Market benchmark index to end 1.2 per cent higher at 2,004.43. The main index of the Abu Dhabi Securities Exchange shed 1.33 per cent to 2,788.64.
Gains in other property and construction-related companies offset the lacklustre performance of Dubai index mover Emaar Properties which closed flat at Dh3.76. Deyaar Development gained 7.6 per cent at Dh0.85. Union Properties jumped by 8.6 per cent to Dh1.01. Arabtec Holding, the country's biggest construction company, added 4.7 per cent to Dh2.90, while engineering and contracting firm Drake & Scull International edged up by 2.3 per cent to Dh0.90.
"It wouldn't be surprising if the markets move higher for the rest of the week. Dubai's rebound signals that the overall sentiment is unchanged - it is still positive," said Ali Khan, managing director of Arqaam Capital Limited. He said risk appetitite is healthy and investors wish to remain invested, while those left out in recent rallies, can take advantage of lower prices.
Banks also rose, paced by the Dubai Islamic Bank which rose by 1.1 per cent to Dh2.80. Emirates NBD, the country's biggest bank by assets, inched up 0.3 per cent to Dh3.61.
Shares of the Dubai Financial Market PJSC finished 2.2 per cent higher at Dh1.89. The stock exchange's price target was cut to Dh1.58 from Dh4.01, while its "sell" rating was maintained by Shuaa Capital.
Dubai was in the red through most of the day as investors cashed in profits from nearly two weeks of rallies, but buyers stepped in towards the close to put the bourse back on track at the 2,000 level.
"The correction was long overdue, and it was a healthy one. There will be more pit stops on the run up to the second quarter earnings season as investors will want to make sure that they are not running a bit ahead of themselves. The consolidation of the markets will create an opportunity for investors to come in at cheaper prices, and that would spur an even bigger turnaround and in a more solid way ahead of corporate earnings," said Haissam Arabi, chief executive officer and fund manager of Gulfmena Alternative
Investments.
Investors turned to laggard stocks as most blue chips are still considered expensive. Gulf Navigation Holding surged 7.6 per cent to Dh0.85, while the Dubai Islamic Insurance rose 6.8 per cent to Dh1.25. National Cooling Co. or Tabreed edged up by 5.6 per cent
to Dh0.95.
"Investors will be keeping an eye on more penny stocks which have the ability to move higher. Many of these smaller companies didn't move as much as the blue chips which rose so much already," said Samer Al Jaouni, general manager at Middle East
Financial Brokerage.
Oil rebounding to trade above $69 a barrel on Tuesday failed to spark buying in Abu Dhabi.
Emirates Telecommunications Co. or Etisalat, the country's biggest phone company, declined by 2.7 per cent to Dh10.80. Natural gas producer Dana Gas PJSC shed 0.9 per cent at Dh1.14. Construction materials manufacturer Arkan Building Materials Co. slumped by 5.1 per cent to Dh4.67.
The other big losers were property companies led by Aldar Properties which fell by 2.2 per cent toDh4.60. Sorouh Real Estate lost 2.6 per cent at Dh3.39. Abu Dhabi's second-biggest property company said it scrapped a joint venture with property company Tameer Holding. The two companies dissolved joint venture projects on Reem Island.
"Consequently, Tameer will continue to have a 100 per cent ownership of the Rise Above Prpoject, and Sorouh will now have 100 per cent of the Gate Towers Project" Sorouh disclosed to the Abu Dhabi bourse.
RAK RAK Properties dropped by 2.6 per cent to Dh0.77.
By Rocel Felix
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