Dubai: Fevered trading in Arabtec saw the firm’s share price reach a record high of Dh8.71 on Wednesday as the Dubai Financial Market index (DFM) rose to 5134.95.
A close eye on trackers left little doubt that the Dubai-based property firm was the powerhouse behind the DFM growth.
Shares worth a total of Dh1.27 billion — about a third of the total value of shares for the whole DFM — changed hands as Arabtec’s price rose from Dh7.92 as trading opened to peak at Dh8.92 twenty minutes before the 2pm close of trading, flirting with the 15 per cent cap, which would have triggered an automatic suspension of trading, before coyly retreating to its closing price. The stock saw an overall rise of 10.67 per cent as traders banked the day’s profits.
Osama Al Ashri, a member of Britain’s Society of Technical Analysts, said Arabtec’s share price could reach around Dh10, but warned the fast trading indicated it was a high-risk purchase.
The DFM index, which closed above 5,000 yesterday for the first time since August 2008, jumped about 80 points to nearly 5,100 within a couple of minutes of opening. The market then began a two-steps-forward, one-step-back series of peaks and troughs which saw a steady average rise, peaking at 5,1295.69 before the Arabtec sell-off saw it drop back to 5,134.95 at close. Total growth for the day stood at 2.31 per cent.
But though Arabtec was the major driver in the upwards push, it was supported by other big players. Emaar, whose announcement on Tuesday of that its first-quarter income had grown 55 per cent to Dh863 million, beating analysts’ estimates, saw its share price rise 1.86 per cent to Dh10.95, with a total trading value of Dh489 million. Al Ashri predicted a target of Dh11.75 to Dh12.50 for Emaar.
Dubai Investment also experienced a 1.89 per cent rise to take its share price to Dh4.39, with Dh356 million worth of shares traded.
Banking proved the most active sector on the Abu Dhabi Exchange index (ADX), with trading in market mover Abu Dhabi Commercial Bank seeing shares worth Dh90.5 million change hands and individual share prices rising 2.52 per cent to Dh7.95.
Almost in step was First Gulf Bank, which rebranded itself with a new FGB logo earlier this week, and which saw trading worth Dh88.1 million to drive its share price up 2.02 per cent to Dh17.30, though given its price, overall share volume was not high.
But although traders who did well out of the day’s trading will be smiling, Al Ashri warned that the reliance on property shares was not healthy for either the Dubai or Abu Dhabi exchanges.
“The DFM volume today was Dh3.77 billion — a new historical high. That’s good and healthy if it’s across all sectors,” he said. “But the property value of this is around 62 per cent — Dh2.4 billion in the property sector. This is not healthy. I cannot be happy about this volume. It’s the same in Abu Dhabi — around 65 per cent for the property sector.
“But perhaps it could be good for the market, because when this sector comes down I think investors will transfer to other sectors in the market.”
