Abu Dhabi: Both the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) indices rose on Monday but maintained weak values of trade with each market amounting to less than Dh1 billion.
While the DFM index went up 0.68 per cent to reach 4,610.67, the ADX general index climbed 1.51 per cent to reach at 4,914.23.
Most powerhouses in Dubai also ended the day in the green, albeit with minor gains. Real estate developer, Arabtec, rose 0.94 per cent to reach a share price of Dh4.28. Meanwhile, Gulf Navigation gained 3.31 per cent, Air Arabia grew 2.86 per cent, Union Properties inclined 1.05 per cent, and Emaar went up 0.42 per cent.
However, Gulf Finance House (GFH) fell 3.42 per cent, but remained one of the highest stocks traded in terms of value, as it took up 27 per cent of the total trade on the DFM — coming second after Arabtec.
Analyst Osama Al Ashry attributed the weak values of trade to the steep plunge in June.
“When the market fell 30 per cent last month, many people lost big sums of their money, so now they don’t want to run the risk of losing again, and thus, they don’t invest a lot of money,” he said.
Al Ashry added that the DFM remains in high risk, and expected the market to decline again.
“The DFM index now needs to either fall to 3,500 in the next two months, so prices drop, and create demand for stocks; or break this downward trend, which will happen if the index breaks the 5,271 resistance level. The latter will put targets above 6,000,” he said.
Discussing individual stocks, Al Ashry, a member of UK organisation, the Society of Technical Analysts, warned about Arabtec, and advised those who invested in it to sell the stock.
“Arabtec has a resistance level of Dh5, but I don’t expect it to reach that level. During the next two months, I think the stock will mark new lows, and I think it should be sold, because it is over-bought at the moment,” he said.
However, he said GFH presents a healthy investment opportunity.
“I expect GFH to trade between Dh0.69 and Dh0.80 in the next month. I think this stock has good potential on the long-term. Plus, it’s a Bahraini stock, and it doesn’t have strong weighting on DFM, which means it can never really affect the movement of the index no matter how much it goes up or down,” the analyst said.
As for ADX, Al Ashry said it was also a high-risk market, and that the index needs to end above 5,000 for a long period of time before ensuring stability.
Of the 32 stocks traded on DFM, 15 went up, 13 went down, and four remained unchanged. Of the 30 stocks traded on ADX, 19 advanced, seven declined, and four remained flat.