Dubai

Liquidity in the UAE’s equity markets remained weak on Thursday as indices moved sideways amid a lack of catalysts in the market.

On the last day of trading of the second quarter of this year, the Dubai Financial Market (DFM) index inched up 0.38 per cent to reach 3,392 as the Abu Dhabi Securities Exchange (ADX) general index slid 0.55 per cent to 4,425.40.

In Dubai, GFH share prices plunged 9.5 per cent, almost reaching the daily cap of a price decline, with prices ending at Dh1.81. The stock was the most actively traded on DFM, and accounted for nearly 21 per cent of the total traded value.

“We’ve seen GFH share prices jump from Dh0.45 last year to Dh3, so I think it’s natural to a see a correction in prices. Many investors have bought the GFH stock, so there’s a lot of liquidity concentrated there, and if you want to book some profits, GFH is the natural stock to sell,” said technical analyst Osama Al Ashry.

He added that GFH share prices could reach Dh1.67 amid corrections.

Meanwhile on DFM, Arabtec’s share prices jumped over 9 per cent during trading hours, ending the day 4.36 per cent higher at Dh2.87. This was just a day after prices plunged 9 per cent as the company’s capital reduction became effective.

On Wednesday, Arabtec confirmed it has completed its recapitalisation programme, which included a Dh1.5 billion rights issue followed by a capital reduction measure that wiped about 4.6 billion shares off the market.

“I would expect Arabtec’s share prices to drop from here, so I would recommend selling the stock. Share prices have a target of Dh2.51, which could be reached next week, and I don’t think there’s enough positive news yet to drive share prices higher,” said Al Ashry, a member of British organisation Society of Technical Analysts.

Discussing performance in the broader Dubai bourse, Al Ashry said the DFM index is also likely to drop as it hasn’t been able to break the 3,537 resistance level.

“I expect the DFM index to touch the support level of 3,280, and if it does, that will open the floor for the next support of 3,067, which is possible in the third quarter of this year. There are some investors still on holiday this week [after the Eid Al Fitr break], so I think we’ll get a better idea of where the index is heading next week when there’s a bit more liquidity,” he said.