Dubai: Stock market traders in the UAE have turned their attention to smaller stocks like Gulf Finance House (GFH), Gulf Navigation, Shuaa Capital, far cry from the earlier preferred blue chips such as Emaar Properties and Dubai Islamic Bank as speculators look at defensive names in an uncertain environment.

Traded volumes in terms of number of shares in GFH have jumped in the recent months. Volumes peaked in 2015 to be at 510 million shares from a low of 200,000 shares in the previous year. This elevated level of volumes have continued so far in the year. About 140 million shares were traded on October 24, while 177 million shares got traded in July.

Other smaller stocks such as Shuaa Capital also have been witnessing robust volumes. About 46.3 million shares were traded on October 28, while another 66.8 million on September 5th 2016.

However, volumes in Emaar Properties, which has the highest weightage on Dubai index, have been subdued. Emaar Properties volumes were at 16 million on October 31 compared to 129 million in November 2014.

“If traders don’t have huge interest in blue chip companies, you would see brokers and speculators try to do something in smaller stocks and control the volatility,” Tariq Qaqish, head of asset management at Al Mal Capital told Gulf News over the phone.

Some said, traders are positioning ahead of uncertain events like US presidential elections, and also a potential rate hike.

“The smaller stocks has market talk backing them up. This generally happens when markets are concerned about big events. We don’t have investors going into bigger stocks because institutions would sell if they were to buy, so they prefer trades in smaller counters like Gulf Navigation and HITS Telecom,” Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities told Gulf News.

Traders are in a risk off mode, so in addition to the safe haven metals, and bonds, they are also looking at small caps which can offer them value.

Gulf Finance House has gained 59 per cent in the past six months compared to 3 per cent loss in Emaar Properties. The Dubai index has gained more than 5 per cent so far in the year.

“We are in a stage of a market where people are probably risk-off and they want to rotate into smaller counters. The retail money is driving these stocks. Institutional money won’t support new positions before November 8th,” said Manibhandu.

“Emaar has been volatile there was a big seller a few weeks ago, and people thought that was overdone, so people bought back. I see the movement in Gulf Navigation is different from Emaar. With Emaar we have genuine institutions taking positions, while I don’t see institutions in GFH or Gulf Navigation,” Manibhandu added.

And its just old money doing the rounds.

“It’s just money rotating and I don’t see evidence of fresh money coming in, and also if we look at price of crude last week, they have come off, and that encourages new money to stay away from trading,” Manibhandu said.