Dubai
Dubai index rose, extending gains for another session to hit its highest level in four and a half months as analysts see more rotation to dividend stocks from the small caps.
The Dubai Financial Market General index closed 0.79 per cent higher at 3,721.28, after hitting a high of 3,722.15, a level last seen on August 20 last year.
Among the most active stocks in trade were blue chips like Emaar Properties and Dubai Islamic Bank, though other small stock like Drake and Scull, HITS Telecom still were the most actively traded ones.
“Buying has come back. There’s a rotation from smaller caps into the dividend payers. And I think what we are seeing between now and when the big results come out, would be continuing rotation,” Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities told Gulf News.
Drake and Scull closed 5.14 per cent higher at Dh0.532, while HITS Telecom closed more than 14 per cent higher at Dh0.627.
Emaar Properties closed 1.4 per cent higher at Dh7.62, while Dubai Islamic Bank closed 1.5 per cent higher at Dh5.93.
The Abu Dhabi Securities Exchange closed 0.64 per cent higher at 4,663.69, after rising as much as 1 per cent at one point.
Too fast?
Saudi’s Tadawul index fell, extending losses for another session. The Tadawul index closed 0.80 per cent lower at 7,081.71, after gaining more than 5 per cent since the budget was announced in late December.
“People have been saying that perhaps the index has run too far too fast. Even the fourth quarter results for banks could be worst than expected,” Manibhandu said.
Elsewhere in the Gulf, the Qatar exchange index closed 0.22 per cent lower at 10,702.03, and the Kuwait stock exchange index closed 0.94 per cent higher at 5,951.84.
Rotation
The rotation would continue until traders had a clear view on oil prices and the fourth quarter results.
“Until people have a reason to change their mind, they will continue to play between dividend and smaller stocks. This trading window I think may be for about four weeks until there is a sea change,” said Manibhandu.
The advise is simple from analysts. “If investors want to expose to rebounding oil prices, then I would advise them to get into dividend play like get into Dubai Islamic Bank,” Manibhandu added.