Abu Dhabi: The Dubai Financial Market (DFM) general index dropped 2.51 per cent on Sunday to end the day at 4,972.78, while the Abu Dhabi Securities Exchange (ADX) index went down 1.14 per cent to reach 4,997.86.
DFM’s most active stocks mostly saw a decline in value, with powerhouses, Arabtec and Drake & Scull International dropping 6.69 per cent, and 5 per cent respectively. Arabtec marked the greatest trade volume on Sunday, but the plunge saw share prices at a value of Dh6.
Deyaar Development also went down 2.96 per cent, and Emaar dropped 1.97 per cent to reach a share price of Dh9.95.
Adel Al Hammadi, an independent investor, attributed the drop in DFM and ADX to profit-taking activity by investors.
“The market had been growing over the past few weeks, and a lot of foreign investors had bought stocks right before the MSCI upgrade in order to benefit, so now, they’re reaping the rewards, and selling these stocks to make profit,” he said.
Al Hammadi added that investors were optimistic about the reclassification of UAE into emerging market status, and thus, bought stocks, which they are currently selling.
Discussing Arabtec, he said, “Arabtec has been seeing strong fluctuations in the market lately. It has been one of the most prominent and most traded stocks, but now people are selling it.”
As for projections, Al Hammadi expected the markets to continue to drop but with a slower rate compared to Sunday’s.
Looking out on the longer term, Mousa Haddad, fund manager at the National Bank of Abu Dhabi, was optimistic.
In an emailed statement, he said, “Into the second half of 2014, expect growth to really pick up and earnings have been coming in very strong this quarter. Markets will likely close the year with multi-highs. Accordingly, looking at the longer term and bigger picture for the MENA markets, investors should use this opportunity to invest their excess cash to benefit from such bull markets,”
In Abu Dhabi, powerhouses such as Aldar Properties, Dana Gas, Waha Capital, and Eshraq Properties also declined.
Dana Gas marked the greatest change in volume with a 4.49 per cent drop, while Eshraq Properties dipped 3.33 per cent, and Aldar Properties went down 2.55 per cent in volume.
Of the 31 stocks traded on DFM, 27 went down, two went up, and two remained unchanged. Of the 31 stocks traded on ADX, 19 declined, eight remained flat, and four advanced.
