Dubai: UAE equity investors are likely to eye fourth quarter results for direction, even as the Dubai index gained nearly 5 per cent last week ignoring falling crude oil.
On Thursday, the Dubai Financial Market General Index ended at 3,842.60, while the Abu Dhabi Securities Exchange ended 0.53 per cent lower at 4,481.36.
The UAE indices witnessed massive volatility in December along with crude oil, which shaved off 50 per cent of its gains after Opec kept the output steady.
“Investors would be shifting away from gyrations of oil prices. There would be a focus on fourth quarter results, and that would be the real underlying drivers in the near term,” Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s asset management group told Gulf News.
“It’s sensible to decouple from oil prices. Crude prices has reached a sensible equilibrium point, and won’t fall much from here so equity investors are taking respite from that. The price fall has been dramatic but it’s very much about how long it stays down, and if it stays down for a longer period of time it is going to have an impact on growth prospects of the GCC,” said Khokhar.
Potential risk:
“I see market some risk in the market. If DFM breaks the support level of 3,550, it may go down further,” said Osama Al Ashri, member of British organisation, Society of Technical Analysts.
ADX index may up much because it has strong resistance at 4,687 and may become risky if it hits support level of 4,227, said Al Ashri.
On Thursday, weak quarterly numbers and dividends from banks in Saudi Arabia weighed on the Tadawul index, which ended 1.09 per cent lower at 8,458.72.
National Commercial Bank (NCB) fell 1.45 per cent at 57.25 Saudi riyals after it reported a net profit of 1.83 billion riyals for the fourth quarter, below analysts’ forecast.
NCB may go down to test support level of 55 next week, said Al Ashri.
Al Rajhi Bank, Saudi Arabia’s second-largest listed lender, said its board was recommending a 0.75 riyal per share cash dividend for the second half of 2014, down from the 1 riyal per share which the bank paid for the second half of 2013.
Shares of Al Rajhi Bank ended 5.30 per cent lower at 53.79 Saudi riyals.
Al Rajhi Bank may go down again to test support level of 47.80 Saudi riyals, Al Ashri said.
Many of the banks would announce their quarterly results from next week. Emirates NBD is scheduled to announce their results on January 18.
