Dubai: UAE stocks are likely to consolidate further, with investors eyeing the results from Emaar Properties, besides keenly watching the volatility in crude oil prices.

The Dubai Financial Market General Index ended 0.96 per cent higher at 3,886.53 on Thursday. The index has gained more than 2.5 per cent so far in the year, after registering gains of more than 11 per cent last year.

“Global oil prices would continue to set direction for our regional and local markets. Valuations are definitely attractive after correction, but we won’t see fundamentals driving the market until we see some stabilisation in oil. As we some stabilisation in oil prices, valuations would start dictating results of our markets,” Rami Sidani, head of investments in the Middle East at Schroders, told Gulf News.

Oil markets remain highly volatile, with US crude losing 9 per cent on Wednesday in one of its biggest routs. In the previous four sessions, prices had rallied almost 19 per cent from their lowest in nearly six years.

But traders have been ignoring cheap valuations in Dubai stocks in a market clouded by volatile crude. “There are ample opportunities for longer term investors to grab when markets dip, DFMGI’s failure to close above 3,920 reflects the magnitude of unjustifiable tentativeness. However, we still think the selectivity is one safer way to build positions, with a focus on income stocks with yields that exceed 5 per cent and a payout ratio below 60 per cent,” said Talal Touqan, Head of Research and advisory at Al Ramz Capital.

Dividend trade:

“Valuations are cheap and the results from the banks have been strong. The dividend yield is very attractive, which in our view signifies a limited downside risk,” said Sidani.

FGB’s board has recommended the distribution of 100 per cent cash dividends and 15.38 per cent bonus shares for 2014. Cash dividends represent 69 per cent of full-year net profits as compared to 63 per cent in 2013.

National Bank of Abu Dhabi, which is almost 70-per cent owned by Abu Dhabi’s government, approved a cash dividend of Dh0.4 per share and a stock dividend of one share for every 10 held for 2014.

“The usual dividend trade that happens at this time of the year hasn’t really happened so there is room for upside. If crude doesn’t have a another sharp drop the dividend trade would carry stock prices to a higher level before it goes ex-dividend, said Sanyalaksna Manibhandu, Manager of Research, NBAD Securities.

Emaar eyed

“We are all waiting for the results of Emaar and if that’s good people would have more confidence in trading stocks going into ex-dividend,” said Manibhandu.

Emaar Malls Group rose 1.8 per cent after reporting full-year results, even though they were slightly below analysts’ average estimate. The firm reported an annual profit of Dh1.35 billion ($368 million in 2014), while analysts had expected Dh1.42 billion.

Emaar Properties, which ended at Dh7.29 on Thursday, would near again resistance level of Dh8, said Osama Al Ashri, member of British organisation, Society of Technical Analysts.