UAE stocks end in the red after week of volatility

Abu Dhabi: UAE markets experienced sharp volatility in the past week, recording massive losses on a daily basis, with the exception of Wednesday when a partial strong recovery occurred.

At its worst, Dubai's benchmark index shed 850 points by Tuesday, while Abu Dhabi's general index nosedived 540 points as investors panicked in reaction to the volatility on international markets and a foreign investor selloff in the UAE.

The markets reacted strongly on Wednesday to the US Federal Reserve's decision to cut its interest rate by 75 basis points.

The Fed move was matched by the UAE Central Bank on Wednesday and as a result Dubai's general index rose 390 points and Abu Dhabi rose 281 points.

The trend was reversed on Thursday and UAE stocks ended the week in negative territory with more than Dh55 billion of losses in terms of market capitalisation.

The real estate and banking sectors were the hardest hit, accounting for more than Dh33 billion of the losses, or 60 per cent of the markets' total, according to a weekly report by Amanah Capital.

The massive selloffs were responsible for the increase in the value of traded shares by 9.2 per cent to Dh26.4 billion, with the Dubai Financial Market (DFM) accounting for more than 75 per cent of the total value of trade.

Emaar Properties maintained its leading position as the most traded shares in terms of value even though they fell 10.3 per cent to Dh13, losing more than Dh9 billion in market value.

This comprised 53 per cent of the real estate sector's losses worth more than Dh17 billion, according to a report by Emirates Securities.

Substantial decline

The banking sector's substantial decline is attributed primarily to the six per cent in losses recorded by Emirates NBD and the National Bank of Abu Dhabi.

Abu Dhabi Commercial Bank, as well as Dubai Islamic Bank retreated by 8.2 and 5.7 per cent as well.

The telecommunications sector ended the week in the red, losing 5.2 per cent on account of etisalat's 2.7 per cent decline, and the 16.4 per cent fall of du, which lost Dh4.4 billion in market capitalisation.

In Abu Dhabi, the energy sector lost more than 10 per cent, as Abu Dhabi National Energy (Taqa) and Dana Gas plunged 11.5 and 9.9 per cent respectively.