UAE indices fall as bank results continue to weigh

Dubai: UAE indices fell on Monday weighed by weaker than expected banking results, and analysts expect the trend to continue.

The Dubai Financial Market General Index closed 1.80 per cent lower at 3,385.31. The Abu Dhabi Securities Exchange General Index closed 0.81 per cent lower at 4,469.81.

“Banking results, that came in below expectations, are still weighing on sentiment. We are seeing a breather after a strong rally in real estate sector,” Musa Haddad, equity fund manager at National Bank of Abu Dhabi’s asset management group said.

Emaar Properties closed more than 2 per cent lower at Dh6.50 despite posting better than expected results, while Arabtec ended 3 per cent lower at Dh1.53. Dubai Islamic Bank ended 3.61 per cent lower at Dh5.60,

Dubai Investments closed more than 5 per cent lower at Dh2.06. Damac Properties closed 3.52 per cent lower at Dh2.47. Out of a total of 35 stocks traded on the exchange, shares of 25 firms fell, while other 6 rose. In Abu Dhabi, Aldar Properties closed 2.6 per cent lower at Dh2.62. Rak Properties closed more than 3.5 per cent lower at Dh0.54.

Positive:

“We will continue this weak sentiment for sometime. As we come closer to Ramadan and Eid period liquidity would start to dry up,” Haddad said.

But that can be a good buying opportunity. “The medium term is still positive if we find this correction coming in, I would start to rebuild positions in the market slowly and not aggressively.”

He expects UAE and Saudi indices to perform well in the second-half as the period would coincide with recovery in crude oil prices.

Saudi Arabia’s Tadawul index closed 0.56 per cent lower at 6,716.49. “The fall in Saudi’s Tadawul index would be at a lesser magnitude than the UAE because UAE has rallied stronger than Saudi markets,” Haddad said.

Elsewhere in the Gulf, Qatar exchange index closed 0.94 per cent lower at 10,092.07.