Abu Dhabi: The UAE’s equity markets ended strongly in the green on Wednesday just hours before the US Federal Reserve concludes its much-anticipated meeting that is expected to hike interest rates for the first time since 2006.
The DFM index jumped 2.27 per cent to reach 2,985.85, continuing its series of corrections that started on Monday.
The corrections follow six consecutive sessions in the red, during which the DFM index shed over 10 per cent, hitting two-year lows on the back of a chaotic Opec (Organisation of Petroleum Exporting Countries) meeting last week that saw oil price plummeting to around $37.
The Abu Dhabi Securities Exchange (ADX) general index was also up, rising 1.25 per cent to reach 4,065.14, as Saudi’s Tadawul index went up 1.41 per cent to reach 6,866.8. Qatar’s QE index was also in the green, ending at 9.862.03 — a 0.74 per cent increase.
Saleem Khokhar, head of equities at the National Bank of Abu Dhabi’s asset management group, pointed that the gains on Wednesday were primarily supported by the banking and real estate companies whose share prices surged.
“After the [drop] that we’ve seen quite recently especially last week, we’re seeing a little bit of a bounce but it’s very early to say that this is the end of the downside to the pressure that we’ve seen despite valuations being absolutely phenomenal.
In the short term, where that oil price goes is anybody’s guess because it’s not based on fundamentals; it’s more based on sentiment,” he said.
Khokhar added that he expected further volatility in the region’s equity markets as pressure continues to mount.
Discussing the impact of a potential hike in US interest rates, he said, “I think it’s pretty much priced in already. It is more now about how they raise the rates in the future. What’s not in the price is if [the Fed] comes out and make a statement that is more aggressive in terms of what the trajectory will be, so I’m not expecting a huge impact from this specific event on the markets.”
Despite the recent corrections in the markets, the total loss in the DFM index in December alone is 6.9 per cent, while the ADX general index shed a total of four per cent in the same period.
On DFM, Emaar, which accounted for 30 per cent of the total trade value, rose 3.75 per cent. Meanwhile, Amlak rose 3.42 per cent, Arabtec grew 1.43 per cent, Dubai Islamic Bank was up 1.82 per cent, Gulf Navigation ended 0.7 per cent higher, and Emaar Mall rose 2.77 per cent.
In the capital, Abu Dhabi Ship Building topped the gainers’ list with a 14.88 per cent jump, followed by Eshraq Properties with 10.64 per cent, Ras Al Khaimah Cement Company with 5.88 per cent, Abu Dhabi Commercial Bank with 5.45 per cent, and Arkan Building Materials Co. with 4.76 per cent.
Of the 35 stocks traded on DFM, 24 went up, seven went down, and four remained unchanged. Of the 30 stocks traded on ADX, 16 advanced, eight declined, and six remained flat.
