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MENAFN - Khaleej Times - 07/03/2010

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(MENAFN - Khaleej Times) Bearish sentiment may persist in UAE stock markets, with benchmark indices likely to stay range-bound through the week amid a lack of investor interest even after strong earnings announcements by some of the major listed companies.

Volumes will remain on lower side and reflect the mood of investors, awaiting a final word on Dubai World's multi-billion debt restructuring plan.

Analysts said bearish trends would continue to prevail in the market until the Dubai World debt issue is seen as settled.They were of the view that day-traders will continue to rule the market, which is moving sideways due to lack of positive news or fresh domestic catalysts.

"These markets are going nowhere fast until we see an orderly resolution of the Dubai World Debt situation," said Matthew Wakeman, EFG-Hermes Managing Director for cash and equity-linked trading.

Dubai Financial Market and Abu Dhabi Securities Exchange showed mixed trend last week as institutional investors stayed away from the ring. Day-traders holding sway dominated the market in thin trade throughout the week.

Low investor confidence reflected in the decline in volume and value of shares traded during the week. Property and banking shares traded in tight range with negative bias while insurance, telecoms, and transport sectors remained under pressure, pushing the equities down.

"The UAE stock markets are directionless in the absence of domestic catalysts. Equities are unlikely to stage a rally and remain flat at low volumes, as traders are reluctant to take larger positions despite having opportunities to have key stocks at much tempting lower rates," an analyst said.

"Only short-term traders were active as the investors holding long-term cash appear to be on the sidelines at the moment," he said.

Mixed Trends
Dubai Financial Market's General Index, or DFMGI, lost 2.87 points, or 0.18 per cent, to 1,584.81 points as investors were in no mood to hold their stocks. DFMGI opened the week on a high note, but failed to sustain the thrust to stay in positive columns. It struggled to breach the 1,600-point barrier, but settled well below the psychological level, as investors were not interested to take long-term positions in the market.

Commercial Bank of Dubai led the losers in DFM's banking index by shedding 9.21 per cent of its share value on the exchange. The bank's shares remained volatile throughout the week and closed at Dh3.45.

Emirates NBD and Al Salam Bank were also among the losers and fell 4.80 per cent and 2.89 per cent, respectively. Gulf Finance House declined 1.10 per cent to 0.90 fils as its 11.43 million shares worth Dh10.42 million traded on DFM.

On positive side, Dubai Islamic Bank advanced 1.79 per cent to Dh2.28

Property Facing Tough Times
Excluding Emaar, other major companies in property sector witnessed a tough time last week as their shares faced tremendous pressure in bearish market. Deyaar and Arabtec Holding led the losers and fell 4.17 per cent and 2.80 per cent, respectively.

Union Properties dropped 2.13 per cent to 0.46 fils as its 17.57 million shares worth Dh8.05 million were traded on the exchange last week

Emaar and Drake & Scull International managed to stay in positive columns by posting gains of 3.82 per cent and 1.20 per cent, respectively. Emaar was the most active shares on DFM as its 106.38 million shares, valued at Dh316.12 million, were traded on DFM last week.

In insurance sector, Arab Insurance Group and Takaful House declined 3.64 per cent and 1.49 per cent, respectively. Other major companies including Dubai Islamic Insurance and Reinsurance Company, Islamic Arabic Insurance Company and Takaful Emarat posted modest gains in broader sluggish market.

In services sector, shares in Global Investment House managed to close in positive columns by gaining 2.99 per cent to Dh1.38. Dubai Financial Market, the operator of the exchange, remained in grip of bears and declined 1.40 per cent to Dh1.41. Its shares fell over 10 per cent in past three weeks.

In the telecom sector, du shares fell 1.06 per cent to Dh2.81 while Hits Telecom Holding Company gained 4.4 per cent to Dh1.66.

Air Arabia was the only gainer in the transport sector. Its shares posted gains of 2.08 per cent to 0.98 fils with 53.36 million shares were traded on the exchange. Gulf Navigation Holding and Aramex fell 3.17 per cent and 2.3 per cent, respectively.

ADX Sustains Key Barrier
The Abu Dhabi Securities Exchange also followed the trends prevailed in neighbouring emirate as its benchmark index lost 25.32 points, or 0.97 per cent, to 2,726.83 points. The benchmark index sustained psychological level of 2,700-point on the strength of property and banking shares. Analysts said ADX is likely to trade in tight range and unlikely to stage a major rally at the moment.

"Company financials haven't had much effect on the market — Dubai World and the lack of liquidity are really controlling the attitude of investors," said Samer Al Jaouni, General Manager of Middle East Financial Brokerage Company.

"Small speculators are active — institutions and big portfolio holders are out of the market, waiting for news on Dubai World. Also, big brokerage and banks are not providing enough liquidity for traders to trade," he said.

Muzaffar Rizvi


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