Dubai: The Dubai index is likely to trade sideways with a positive bias next week as the MSCI will increase the weightings on select stocks from next week.

MSCI, whose gauges are tracked by investors managing about $9 trillion in assets, included the U.A.E. and Qatar in its emerging markets index in June. The company said in April it would cut the weighting of some stocks by a factor of 0.5 because of ownership restrictions.

In its latest review, MSCI said it will remove the adjustment for stocks including Emaar Properties, Dubai Islamic Bank PJSC in Dubai, Qatar National Bank SAQ, and Industries Qatar QSC in Qatar from November 25.

“Markets will see more activity in the latter part of the week as we get closer for implementing MSCI increase of weightings on select stocks,” Mohammad Ali Yasin, managing director at NBAD securities told Gulf News.

On Thursday, Emaar Properties, which is the developer of the world’s tallest tower in Dubai, ended steady at Dh10.90 per share. Dubai Islamic Bank ended 0.53 per cent higher at Dh7.64.

“This will provide momentum to the markets and a strong push to the markets to move up. We see a sideways movement to higher. I don’t see markets moving higher than 4,750-4,800,” said Yasin.

The Dubai Financial Market General Index ended the week 0.26 per cent higher at 4,563.39. The index has gained close to 40 per cent so far in the year, making it the best performing market regionally. However, off late, the volumes have dipped to nearly half as investors have been diverting some of the funds to the primary market in shares of Emaar Malls Group, Amanat, Marka etc and Dubai Parks and Resorts, whose IPO subscription is underway and its institutional tranche has already been oversubscribed.

“This drop in volumes has been due to uncertainty in international markets and a drop in crude oil. there has been a huge outflow to the IPO markets,” said Tariq Qaqish, head of asset management at Al Mal Capital.

This (increase in weights of MSCI) will increase liquidity. The volumes have been low due to Dubai Parks and Resorts IPO, but it would be difficult for the market to change the range, said NBAD’s Yasin.

Positive on banks

Analysts are positive on bank stocks among others.

“Medium and longer term outlook for real estate companies and banks and consumer durables remains solid given the strength of the underlying economy despite the weakness in oil prices,” Saleem Khokhar, head of equities at NBAD’s asset management group.

The banking sector in the UAE has reported an eight per cent loan growth for the first nine months of this year and bank lending remains within prudential ratios set by the central bank, said Saeed Abdullah Al Hamiz, Assistant Governor for Banking Supervision at the UAE Central Bank on November 17.

The UAE banking sector, the largest in the region posted an asset growth of 10 per cent for the first nine months of this year to Dh2.31 trillion. Banking sector assets increased by an annual average of about 6 per cent during 2010-2013.