Dubai: Dubai index reversed early gains as traders decided to book profits after the recent rally.

The Dubai Financial Market General index rose to as high as 3,730.64, before closing 0.26 per cent lower at 3,707.45.

Gulf Finance House fell from its highest level in 52 weeks, ending 0.41 per cent lower at Dh2.42. Drake and Scull closed less than a per cent lower at Dh0.548. Shuaa Capital closed more than 9 per cent lower at Dh1.66. Union Properties, HITS Telecom and Amanat all closed flat.

Out of a total of 37 stocks traded on the exchange, shares of 27 firms fell, while other 6 rose. The rest remained steady.

The Abu Dhabi Securities Exchange General index closed 0.88 per cent lower at 4,657.57. Abu Dhabi Ship Building closed 9.68 per cent lower at Dh2.8. Etisalat closed 1.34 per cent lower at Dh18.4. National Bank of Abu Dhabi closed 1.40 per cent lower at Dh10.55. Union National Bank closed 2.78 per cent lower at Dh4.55. Out of a total of 31 stocks traded on the exchange, shares of 25 firms fell, while other 7 rose. The rest remained steady.

Going ahead, investors will focus on stocks with attractive dividend yields.

“The UAE provides with the most attractive dividend yields compared to other parts of GCC. People will be accumulating dividend stocks at this point of time,” said Musa Haddad, equity fund manager at National Bank of Abu Dhabi’s asset management group.

“We think dividend would be the main theme right now. First quarter generally performs very well,” said Haddad.

Generally, Dubai and Abu Dhabi indices are better placed in terms of performance because of its diversification, Haddad said.

Dubai index gained more than 45 per cent last year, and has risen 5 per cent so far in January. Abu Dhabi gained 31.66 per cent last year.

Saudi Arabia’s Tadawul index, which led regional gains, may be in for some correction.

The Tadawul index closed 1.60 per cent higher at 7,008.98 on Monday, after losing 2 per cent in the past three weeks.

“We want to see the compliance of the Opec agreement, which would have an impact on the country The PE multiples are not very attractive,” said Haddad.

Saudi stocks were trading at 17 times PE multiples, compared to 11 times during the same period last year. The index gained 33 per cent in 2016.

“Even results have been flat or below expectations, not justifying high valuations. Liquidity has been addressed, but there are limitations on loan growth, and therefore an impact on Net interest margins,” he added. Haddad likes insurance and health care sectors, which he expects to outperform due to national transformation plan.

Kuwait index is the best performing market.

“The market was not performing well in the past 10 years. One reason is Kuwait is in frontier market, and Pakistan would be upgraded. There are possibilities of increase weightage for Kuwait, therefore attract passive money,” Haddad said.

Analysts expect the changes to the MSCI indices to happen in the next six months or so.

“Second reason, is they are planning to come out with a bond issue, so that has attracted more liquidity from retail participants,” he added.

On Monday, the Kuwait index closed 0.57 per cent higher at 6,679.62. The Qatar exchange index closed 0.09 per cent lower at 10,950.