Abu Dhabi: Both the Dubai Financial Market (DFM), and the Abu Dhabi Securities Exchange (ADX) ended the day’s trade on Monday in the red, as most powerhouses saw major drops in their share prices.

The DFM index fell 4.32 per cent to end at 4,296.00 supported by a 9.90 per cent plunge in Arabtec share value, while the ADX general index dropped 1.96 per cent to reach 4,709.63. The DFM has dropped approximately 16 per cent since the end of May.

Construction giant, Arabtec, had ended the day on Sunday with a 9.86 per cent drop, approaching the 10 per cent cap for maximum drop allowed. Its plunge on Monday ended share prices at a value of Dh3.46, marking the lowest price since March.

Arabtec started the day’s trade at a share price of Dh3.79, and immediately declined to Dh3.5 in the first 10 minutes of trade. Prices continued to fluctuate until they reached Dh3.46 shortly after 10.30am, and remained stable throughout the rest of the day.

Other powerhouses in Dubai saw a decline in share prices as well, with Drake & Scull International falling 7.07 per cent, Union Properties dropping 6.22 per cent, and Emaar losing 4.86 per cent. Dubai Investments also decreased 5.20 per cent.

Sebastien Henin, head of asset management at The National Investor, attributed the drop in both markets to a lack of catalysts.

“Following the inclusion on the UAE [into the emerging market status] by MSCI, there haven’t been short-term catalysts. Plus, the fact that we’re during the summer months, and close to Ramadan, means investors are going out of the market for the moment, and market activity is quiet,” he said.

 

Lack of visibility

Discussing Arabtec’s performance, Henin said, “Investors don’t like the lack of visibility. Recently, we’ve seen a lot of changes [in Arabtec]. Some investors want on the short term to exit, and when things are more stable, they will come back.”

He added that investors only buy stocks when they see stability in the company, but that has not been the case for some time.

“[Arabtec] is in a phase of re-structuring now. At some point they will have to communicate with the market, and discuss their strategies,” Henin said.

As for the outlook for the market, Henin expected further profit-taking activity in the near future, saying that the markets have “gone too high too fast” and thus, need time to correct.

In the capital, most powerhouses marked little to no losses in value, as Aldar Properties fell 0.27 per cent, and First Gulf Bank went down 0.25 per cent.

Of the 31 stocks traded on DFM, 26 went down, four went up, and one remained unchanged. Of the 36 traded stocks on ADX, 27 declined, six advanced, and three remained flat.