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MENAFN - Khaleej Times - 07/02/2010

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(MENAFN - Khaleej Times) UAE stocks are expected to maintain a steady trend this week, with investors seeking trading clues from corporate results from blue 
chip companies.

Full-year and fourth-quarter results of Emirates NBD, Dubai Islamic Bank, Emaar and du may set off rallies depending on the strength of their earnings. Property, banking and insurance sectors will be in focus during the week and investors will have a close eye on major listed companies in those areas.

Analysts said any rally will however be short-lived as the markets are seen in a long-term downtrend amid a lack of positive news on the domestic front. Poor corporate results in the fourth quarter may halt last week's rally and reverse the course in due time because investors are not willing to cash in on the low price opportunities in 
key sectors.

The Dubai Financial Market's General Index is likely to trade in tight range this week and may test key levels either on upside or downside, while Abu Dhabi Securities Exchange's main index likely to sustain the 2,700 level in the wake of recovery in banking sector last week.

Dubai Financial Market and Abu Dhabi Securities Exchange maintained steady trends with bullish sentiments last week. Dubai Financial Market's General Index gained 63.78 points, or 3.98 per cent, last week to 1,663.21 points. After a slide downfall on Sunday, the market traded in positive columns throughout the week. It broke the psychological barrier of 1,600 point on Monday and maintained rising trend till weekend. Corporate results from major companies will set the future trend of market. The benchmark index may test key levels on upside or downside, depending on the fourth-
quarter results.

"The market is really slow — there are no catalysts so everybody is still waiting for big companies to come out with their figures," said Chamel Fahmy, senior trader at Beltone Financial.

"Companies did better than expected and now everyone is waiting for Emaar Properties which is expected to do very well," said Nour Al Zoubi, General Manager at MAC Sharaf Securities in Dubai.

"If any new money comes in, the uptrend should continue."

Dubai's benchmark index is down 7.8 per cent this year and Abu Dhabi's measure has dropped 1.4 per cent.

Emaar Rises
In the property sector, Emaar shares gained some grounds amid hopes of good corporate results for 2009. The company's shares surged 7.12 per cent last week and closed at Dh3.31 from Dh3.09. The share is likely to remain under pressure ahead of the corporate result announcement.

Drake and Scull International also moved steady and advanced 3.53 per cent to Dh0.88 on securing some orders last week. Union Properties also recorded 1.92 per cent gains and closed the week at Dh0.53 while Arabtec Holding's shares remained steady at Dh2.29, reflecting a gain of 0.88 per cent.

In the banking sector, Emirates NBD — the biggest bank of the region, traded in positive columns and its shares recovered some losses incurred in past couple of weeks. Its shares opened the week at Dh2.49 and crossed the Dh2.50 barrier by adding 4.08 per cent in value this week. Its shares closed the week at Dh2.55, but likely to test the key Dh2.50 level this week.

Dubai Islamic Bank also followed the rising trend and advanced 5.83 per cent to Dh2.18 while Gulf Finance House traded under pressure throughout the week and fell into negative columns. Its shares declined 3.54 per cent and closed the week at Dh1.09. Despite bullish market, insurance sector followed the declining trend last week as major companies fell heavily last week. Dubai Insurance continued its downward trend and tumbled by 9.58 per cent to close the week at Dh18.40. Takaful House also fell 5.19 per cent to Dh1.46.

On positive sides, Dubai Islamic Insurance & Reinsurance Company advanced 3.41 per cent to Dh0.91 and Islamic Arabic Insurance Company, or Salama, gained 2.6 per cent to Dh0.79

In services sector, shares in Shuaa Capital, Global Investment House and Gulf General Investment Company recorded significant gains last week. Shuaa Capital surged 16.52 per cent to Dh1.34 while Global Investment House and Gulf General Investment Company finished the week up 10.34 per cent and 7.53 per cent, respectively.

Shuaa Capital yesterday reported a net loss of Dh529.8 million for 2009. Shares in Dubai-based investment bank may trade under pressure this week, although the bank has narrowed the loss from Dh889.6 million in 2008.

In telecom sector, du shares stood firm and moved on higher sides amid expectations of higher corporate results in fourth quarter. Its shares crossed Dh3 key level and closed the week at Dh3.03.

ADX's Rising Trend
Abu Dhabi Securities Exchange also maintained rising trend last week. The benchmark index of Abu Dhabi Securities Exchange advanced 77.27 points, or 2.94 per cent, as the investor confidence rose following recovery in banking sector shares. The benchmark index broke the psychological barrier of 2,700 points on Wednesday last and closed the week at 2,705.44 points. The index may trade in tight range this week.

"We have seen some rebound recently," said Rami Sidani, Head of Investment at Schroders Middle East.

"In the region, the UAE has the highest correlation with international markets given the participation of foreign investors."

"We are still seeing low volumes as investors are waiting for more clarification from Dubai World and more fourth-quarter announcements," Rami Sidani said.

Foreign Investment
Dubai Financial Market said the value of shares bought by foreign investors, or non-UAE nationals, during the week ended on February 4 reached Dh511.3 million comprising 45.7 per cent of the total value of stocks traded during the period.

The value of stocks sold by foreign investors during the same period reached Dh545.8 million comprising 48.8 per cent of the total value of stocks traded during the period. Net foreign investment on the market reached Dh34.5 million during the same period, as aggregate sell.

Institutional Investment
The value of stocks bought by institutional investors during last week reached Dh192.3 million comprising 17.2 per cent of the total value of stocks traded during the period. The value of stocks sold by institutional investors during the period reached Dh157 million which constitutes 14 per cent of the total value of stocks traded during the period. Net institutional investment on the market reached Dh35.3 million during the period, as aggregate sell.

By Muzaffar Rizvi


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