Dubai: The Dubai Index, which fell 0.9 per cent in Sunday’s trade compared to Saudi Arabia’s 3.3 per cent decline, is likely to continue outperforming regional peers, analysts said on Sunday.
The Dubai index has gained more than 8.7 per cent since the start of the year, compared to 8.12 per cent gains in the Saudi index. That makes it the top regional performer so far, with analysts expecting the trend to continue.
“Surprisingly Dubai was doing worse than Saudi Arabia when crude prices fell, so things have changed, which is positive for Dubai,” said Sanyalaksna Manibhandu, manager of research at the National Bank of Abu Dhabi Securities.
“We would probably see the UAE markets outperform going forward. The UAE deciding to de-regulate fuel prices is going to be seen as a positive because [the] UAE is not the highest in terms of per capita consumption of crude,” Manibhandu said. “People would invest saying that they are ahead of the game.”
Late last month, the UAE government decided to eliminate fuel subsidies, a move that’s expected to trigger fiscal prudence on the budgets.
Wait and see
However, technical analysts advised investors to stay on the sidelines.
“I advise investors to wait and watch and keep away from names [such as] Amlak, which is a high-risk [stock] and is overbought on short- and medium-term charts,” said Osama Al Ashri, member of British organisation, Society of Technical Analysts. “Amlak may hit a new low of Dh1.88 by the end of this week or next.”
On Sunday, Amlak shares ended 8.51 per cent lower at Dh2.15. Damac Properties, which closed 2.58 per cent higher at Dh3.18, could witness consolidation Dh3.10-3.37, Al Ashri added.
Shares of Emaar Properties are in the spotlight after the company, which has the highest weightage on the index, posted a 16 per cent jump in net profit in the second quarter to June.
Al Ashri advised investors to buy Aldar at Dh2.9, adding that they should hold their positions on Dubai Islamic Banck, which could hit a resistance level of about Dh8 by next week.
The Abu Dhabi index, which closed 0.9% lower at 4.790.94, is waiting for resistance level of 5,050 within the next few weeks, Al Ashri said.
Aldar Properties ended more than 2 per cent lower at Dh2.63, while Dana Gas closed 3.5 per cent lower at Dh0.53.
Out of a total of 27 firms traded on the exchange, the shares of four firms rose, while those of another 17 firms fell.
