Arabtec shares extend gains in steady Dubai market

Dubai:

Arabtec and HITS Telecom were the most active stock in trade even as the Dubai index moved between gains and losses to end the session flat.

Arabtec closed more than 6 per cent higher at Dh1.49, and was the most active stock in trade, contributing to 28 per cent of the total volume of Dh1.5 billion.

HITS Telecom fell 2.60 per cent lower at Dh0.750, after gaining nearly 15 per cent in the previous session. Drake and Scull closed 2.80 per cent higher at Dh0.550. Aman or Dubai Islamic Insurance and Reinsurance Co. closed 7.63 per cent lower at Dh1.09. The Dubai Financial Market General index closed 0.3 per cent lower at 3,720.59, after moving in a tight range of 3,712.21-3,727.40.

“Things look fine for us in the UAE markets, and the indices may continue to move higher from here,” said Hisham Khairy, Head of Institutional Trading, Menacorp.

Union Properties closed flat at Dh1.15, after witnessing robust trading activity in the past few sessions. “The stock expected to continue its move higher anytime soon and target the Dh1.25,” Khairy said.

Out of a total of 40 stocks traded on the exchange, shares of 17 firms fell, while 15 rose. The rest remained steady.

The Abu Dhabi Securities Exchange General index closed 0.4 per cent higher at 4,681.28. Asmak or International Fish Farming closed 11.76 per cent higher at Dh4.18. Etisalat closed 0.53 per cent higher at Dh18.80.

Out of a total of 30 stocks traded on the exchange, shares of 13 firms rose, while other seven fell.

Elsewhere in the Gulf, the Saudi Arabia’s Tadawul index closed 0.18 per cent higher at 6,907.25. The index has gained more than 18 per cent in the past one year, making it the top performer in the Gulf markets. “Valuations appear to be quite demanding in Saudi stocks at this time,” said Vijay Harpalani, Fund Manager, Asset Management at Al Mal Capital.

The Qatar exchange index closed 0.04 per cent higher at 10.704.29. The Muscat MSM 30 index closed 0.58 per cent lower at 5.762.48. The Kuwait Stock Exchange index closed 1.28 per cent higher at 6,107.68.

Blue chips:

Apart from participating in small cap stocks, investors have also been attracted towards dividend paying names.

“Investors have started looking at dividend paying stocks with attractive valuations. We saw a pickup in demand in some of the blue chip banks due to attractive dividend yields,” Harpalani said.

Most of the blue chips have underperformed the broader indices and especially the small cap stocks like Gulf Finance House, and Gulf Navigation, which has doubled or trebled in value in the past year. This compares with 12 per cent gains in Dubai index in 2016.

Accumulating quality stocks:

Amid recovering market due to stability in oil prices, fund managers are preferring stocks with cash flows.

“While oil prices seem to have stabilised around USD 55 levels, the macroeconomic uncertainty still prevails. We would look at accumulating quality stocks with visibility on cash flows and attractive dividend profiles. These would be very few names, hence could attract scarcity premium,” Harpalani said.