Dubai: Some large cap stocks in Dubai are looking attractive over a medium to long-term perspective, analysts said, after the Dubai index shed more than 14 per cent in the week.
“Stocks are attractive on a medium to long term perspective; we would wait for the fear factor to dissipate before entering stocks that have attractive valuations. I would stick to the large cap liquid stocks,” said Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s asset management group told Gulf News.
On Thursday, Dubai index led the Gulf markets lower as a further decline in crude oil and global growth concerns continued to rattle investors.
The Dubai Financial Market General Index fell as much as 5.685 per cent in trade before closing 4.95 per cent lower at 4,270.43. Emaar Properties, which was the most active stock in value terms, fell 2.94 per cent to end at Dh9.90 per share. Arabtec fell 8.67 per cent to end at Dh3.58 per share.
“There is a lot of nervousness in the market. There is a possibly of follow-through sell-off given the weakness in global markets and oil prices touching below $80,” Khokhar.
On the broader index, out of a total of 34 shares traded on the exchange, shares of 31 companies declined.
In Abu Dhabi, the general index ended 2.29 per cent lower at 4,879.92. National Bank of Umm Al-Qaiwain fell more than 9.85 per cent in trade, followed by Abu Dhabi Ship Building Co, which fell also declined 9.76 per cent.
Out of a total of 33 companies, shares of 2 companies rose, while 27 of them declined and the other 3 remained steady. Saudi Arabia’s Tadawul index fell as much as 5.685 per cent, making it the second biggest fall in the region.
Reassessing IPO’s:
“I think this (the stock market decline) calls for reassessment whether it’s an ideal time to come out with an IPO,” said an analyst, who wished not to be named, as he was part of a few IPOs.
Amanat, which opens subscription to the shares on Monday, plans to list in late November. This will mark the third IPO in the year from companies which has sought to capitalise on a revival in market sentiment.
Marka and Emaar Malls, which witnessed good response from investors, got listed on the Dubai Financial Market in September and early October respectively.
The ADX hoped to see at least two IPO’s before the end of the year, its CEO said last month.
MSCI at March lows:
Globally, the MSCI Emerging Markets Index fell to the lowest since March, and the Stoxx Europe 600 Index posted the longest slump in 11 years.
While retail sales in the US dropped more than forecast in September, Japan and the euro area are throwing up fresh signs of weakness by the day and emerging markets such as China are dragging instead of driving growth.
The United States economy may weaken as the Fed weighs when to raise interest rates. Oil prices also fell in a bear market, with the International Energy Agency predicting the lowest demand growth since 2009. Brent crude, a benchmark for more than half of the world’s oil, lost 1.21 per cent to $82.77 per barrel, the lowest on a closing basis since 2010.
