Dubai

The UAE’s main equity indices ended in the red on Thursday as oil prices inched down and uncertainty — both on the geopolitical and economic fronts — continued to bog down investors.

The Dubai Financial Market (DFM) index fell 0.21 per cent to 3,460.21, while the Abu Dhabi Securities Exchange (ADX) slid 0.22 per cent to 4,327.58.

“It’s a continuation of uncertainty and the lack of investor appetite. I think some of the liquidity that was in the market was rotated towards the IPO (initial public offering) of Emaar Development, and with the listing on the 22nd, we hope to see the flow go back to markets,” said Tariq Qaqish, managing director of asset management at Menacorp.

Emaar Development, a subsidiary of developer Emaar Properties, said on Thursday it will offer ordinary shares for its IPO at a price of Dh6.03 per share, with trade on the company to commence on November 22.

The listing of the subsidiary has been strongly anticipated by investors in the UAE amid a scarcity of new listings in the Gulf region due to weaker liquidity and weaker economic growth.

The Emaar Development IPO will come just weeks before another major listing; that of Adnoc Distribution on the Abu Dhabi bourse.

“I believe the Adnoc IPO will get more attraction, being in the oil and gas sector that reflects the UAE economy. Of course, it depends on the valuation. I think the IPO price range of Emaar Development was above investor expectations. That’s why it was priced at this lower side of the range … I think when companies want to go public, they need to price the IPO below the fair value, so there’s potential for upside after the listing,” Menacorp’s Qaqish said.

Aside from new listings, going forward, Qaqish said he expected investors to start looking at allocations towards companies that are likely to distribute strong dividends in early 2018, as well as positive-cash-flow businesses.

On Thursday, Emaar and GFH Financial Group alone accounted for more than half of the Dh630.7 million traded on DFM. GFH, whose share prices jumped 4.43 per cent, topped the market in terms of traded value, with Emaar coming in second places. Emaar’s share prices inched down 0.25 per cent.

Meanwhile, Drake and Scull International gained 0.56 per cent a day after the company reported wider losses for the third quarter of 2017. Damac share prices slid 0.83 per cent, and Amanat gained 1.61 per cent.

In Abu Dhabi, the market’s powerhouses continued to account for most of the traded values, with Etisalat being the most actively traded. Its share prices fell 1.19 per cent, as First Abu Dhabi Bank gained 0.49 per cent, Abu Dhabi Commercial Bank slid 0.7 per cent, and Aldar Properties ended flat.

Of the 37 companies traded on DFM, 17 ended lower, 13 gained, and seven remained unchanged.