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MENAFN - Khaleej Times - 14/02/2010

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(MENAFN - Khaleej Times) UAE stocks are expected to stage a smart recovery this week on the back of healthy corporate results, which will boost investor confidence in the equities.

The stronger-than-expected earnings from banking majors — Emirates NBD and Dubai Islamic Bank, and leading property developer Emaar, are expected to guide the markets into positive columns on sustainable basis. Investors and day traders, staying on sidelines since start of this year, are likely to give up their cautious approach and they may enter into the market to reap the earnings' benefits in shape of dividends and bonuses that will also improve the trading volumes on both bourses.

Analysts said property and banking sectors would remain the prime focus of investors while telecom and aviation stocks will also attract buyers amid hopes of solid corporate announcements from Emirates Airline and Emirates Integrated Telecommunications Company, or du, this week.

Air Arabia, a Sharjah-based low-cost carrier, on Saturday showed continued profitability despite difficult times in aviation sector by posting Dh452 million profits in 2009. The Shajah-based airlines annual turnover stood at Dh2 billion with load factor of 80 per cent, may tempt investors to buy aviation stocks in general and Emirates Airline in particular.

Analysts are of the opinion that the investors will keep a close eye on major listed companies that will keep markets steady on upside. However, no big rallies are expected until Dubai World announces a standstill agreement on 22 billion debt with creditors.

The Dubai Financial Market's General Index is likely to maintain a rising trend with bullish sentiments this week. The index may cross 1,700 levels while trading volume is also expected to improve.

Abu Dhabi Securities Exchange's main index will sustain the 2,700 level this week and may trade above 2,750 barrier in the wake of strong recovery in banking sector.

"After a rally in late January, the market seems to have shifted to a sideways trading mode," Shuaa Capital wrote in a research note.

"We highlight the minor support and resistance levels at 1,600 and 1,680, respectively. A break in either direction should shed light on the following move," it said.

Dubai Financial Market and Abu Dhabi Securities Exchange maintained steady trend last week. Dubai Financial Market's General Index gained 12.99 points, or 0.78 per cent, and ended the week at 1,676.2 points. The market opened the week on bearish note, but later showed steady trend on positive corporate announcements from major blue chip companies.

"There might be a technical rebound, with some buying coming into the market, especially in Emaar, Arabtec and Dubai Financial Market," an analyst said.

In the property sector, Emaar shares lost 2.42 per cent, as investors were sceptical ahead of its fourth-quarter results. The company's shares closed the week at Dh3.23 after hitting as high as Dh3.32 and lows of Dh3.13 before the result announcement. The share is likely to maintain a steady trend this week. Deyaar and Union Properties also declined 1.92 per cent and 1.89 per cent, respectively. On positive side, Arabtec Holding's shares remained steady at Dh2.30, reflecting a gain of 0.44 per cent. Its share may get a boost in case shareholders approve a merger deal with Abu Dhabi-based Aabar Investments.

In the banking sector, Dubai Islamic Bank recorded a significant growth after disclosing the fourth-quarter earnings. Its shares surged 11.93 per cent and closed the week at Dh2.44, after touching as high as Dh2.60.

Emirates NBD and Gulf Finance House also followed the bullish trend set by Dubai Islamic Bank. Emirates NBD — the biggest bank of the region, shares gained 5.10 per cent to Dh2.68 per cent, while Gulf Finance House also advanced 3.67 per cent to Dh1.13.

Commercial Bank of Dubai fell into negative columns and closed the week 3.14 per cent down to Dh3.70

Islamic Arabic Insurance Company, or Salama, led the recovery in insurance sector last week. Salama shares rose 6.33 per cent and closed the week at Dh0.84. Takaful House also gained 1.37 per cent while Dubai National Insurance & Reinsurance Company and Dubai Islamic Insurance & Reinsurance Company fell 1.30 per cent and 1.10 per cent respectively.

In services sector, shares in Global Investment House, Shuaa Capital and Dubai Financial Market declined. Global Investment House shares fell 7.03 per cent to Dh1.19 while Shuaa Capital and DFM declined 6.72 per cent and 3.05 per cent, respectively.

In telecom sector, du shares fell slightly ahead of corporate results in fourth quarter. Its shares fell below Dh3 key level and closed the week at Dh2.99, reflecting a decline of 1.32 per cent. Abu Dhabi Securities Exchange also maintained rising trend last week. The benchmark index of Abu Dhabi Securities Exchange advanced 38.56 points, or 1.42 per cent, as the recovery in banking sector boost investor confidence in the market. The benchmark index fell below the psychological barrier of 2,700 points on Sunday and again crossed it to maintain a steady trend throughout the week. The index may test 2,750 point level this week and continued upside trend.


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