Dubai: The UAE’s main equity indices continued to move sideways on Wednesday just hours before the US Federal Reserve concludes its two-day meeting, during which it is expected to keep interest rates steady.
The Dubai Financial Market (DFM) index slid 0.51 per cent to reach 3,419.06, while the Abu Dhabi Securities Exchange (ADX) general index rose 0.62 per cent to reach 4,581.26.
Tariq Qaqish, managing director of asset management at Mena Corp, said there weren’t enough catalysts in the market to support buying activity, and that investor sentiment was impacted by international news such as political uncertainty with North Korea as well as the French elections.
“There are a few concerns globally that are affecting the regional markets more than the international markets … so there’s low confidence and low momentum, which are both keeping liquidity low in the markets,” he said.
The final round of the French elections will take place on May 7, with most analysts expecting Emmanuel Macron to win the presidency over his opponent Marine Le Pen.
In Dubai, traded values reached Dh368.7 million, well below the Dh1 billion-plus highs seen in the first quarter of 2017.
“If you look at what drove liquidity previously, it was the M&A [mergers and acquisitions] news, especially with GFH, and the National Bank of Abu Dhabi with First Gulf Bank. It was also dividend season, but now we’re coming closer to Ramadan and the summer period, plus first quarter results are not that impressive, so there’s lower interest from investors,” Qaqish said.
He added that market performance over the next months will depend on oil price movements and how regional governments move with their spending plans (whether they hold back on spending or grow their spending).
On DFM, GFH Financial Group accounted for nearly 40 per cent of the total market’s trade value, topping the market in terms of value traded. Its share prices fell 8.9 per cent to reach Dh2.24.
Meanwhile, Arabtec’s share prices continued to slide, falling 2.39 per cent as the company formally invited shareholders to subscribe to its upcoming rights issue. Share prices on Wednesday were at Dh0.817, still below the Dh1 mark at which Arabtec will launch its Dh1.5 billion rights issue.
Union Properties also dropped 2.86 per cent.
Elsewhere in the GCC, Saudi Arabia’s Tadawul index also fell 0.64 per cent to end at 6,967.71 after a televised interview with the Kingdom’s Deputy Crown Prince Mohammad Bin Salman failed to excite investors.
The Crown Prince said the government’s reforms were succeeding in protecting the kingdom against low oil prices, and promised strong investments in the coming years. He said the government would focus on investing in the mining sector, developing the weapons industry, supporting an auto industry, and improving the logistics sector.
