Despite surging crude, Gulf equities rally hindered

Dubai: A more than 10 per cent rally in crude oil failed to spark a follow-through buying in Gulf equities on Sunday.

“This may be due to lack of interest from foreigners in the market. Some investors were less convinced about the rally on Friday in the US markets calling it a technical rebound,” Sebastien Henin, head of asset management at The National Investor told Gulf News.

“We might see some profit-taking later in the week,” Henin said, adding “the Dubai index may go below 3,000 levels.”

The Dubai Financial Market General Index closed 1.01 per cent higher at 3,011.47 reacting to a rally in crude prices on Friday. Oil jumped more than 10 per cent on Friday after UAE Oil Minister Suhail Al Mazroui said producers were ready to cooperate amid “inappropriate” prices.

In stock specific action, Emaar Properties closed 1.68 per cent higher at Dh5.45, while Dubai Parks closed more than 3 per cent higher at Dh1.13.

“Long term traders in Emaar Properties should remain neutral at current times with the aim to reposition only after stronger trending characteristics appear on long term charts. The break below previous medium term support at Dh5.70 has shown further weakness in the share and points towards a downwards continuation,” said Menacorp in a note.

Gulf Finance House closed 2.24 per cent higher at Dh0.548. Amlak Finance also closed 3,36 per cent higher at Dh1.23 post its results. Out of a total of 34 stocks traded on the exchange, shares of 24 firms rose, while shares of other 3 firms fell.

Momentum driven

Shares worth Dh345 million were traded on the Dubai bourse on Sunday, not even 30 per cent compared to Dh1.2 billion before the Ramadan period.

“We need the volatility to go down for investors to come back. We cannot have oil prices going up 10 per cent, and European banks posting such weak numbers. we need all markets to stabilise,” Henin said, adding “this would have a positive impact. People are not even looking at fundamentals, or valuations. It’s mostly momentum driven.”

In Abu Dhabi, the general index closed almost flat, up 0.08 per cent to be at 4,075.23.

“Long and medium term traders should remain outside of the market while bearish scenarios continue to develop. In the medium term the market remains strongly bearish,” Menacorp said in a note to its clients.

RAK Properties closed more than 5 per cent higher at Dh0.57. Aldar Properties closed more than 3 per cent to be at Dh2.38. Methaq Takaful Insurance closed 13 per cent higher at Dh0.60, while Dana Gas closed 2 per cent higher at Dh0.51.

“The long term trend is strongly bearish for the time being as marked by the fall below many daily strong support zones in Aldar Properties. Long term Bullish scenarios have been postponed for now and traders should be waiting for fatigue in this descend before considering new positions in this share,” Menacorp said.

Out of a total of 33 stocks traded on the ADX, shares of 14 firms rose, while shares of other 7 firms fell. Elsewhere in the Gulf, Muscat Securities MSM 30 index closed 0.14 per cent higher at 5,365.29, while Kuwait Stock Exchange index closed almost flat, down 0.01 per cent at 5,131.05. The Bahrain bourse all share index closed 0.03 per cent lower at 1,166.05.

Factbox: Qatar index leads gains in Gulf

Qatar index led the gains in the Gulf. Qatar exchange index closed 1.21 per cent higher at 9,600.97.

In Qatar, Industries Qatar added 2.1 per cent to the highest in more than a week. Gulf International Services QSC rallied 6 per cent, the largest increase in three weeks, after six days of declines.

Saudi Arabia’s Tadawul closed 1.82 per cent lower at 5,557.92. “Saudi index should stay volatile in the coming days,” The National Investor’s Henin said.