Real estate shares get battered while banks are favoured in Dubai

Dubai: Traders in Dubai continued selling their real estate share exposures even as banks were favoured. In Abu Dhabi, weaker than expected results led to a lower limit on Waha Capital’s shares.

Emaar Properties, which has the highest weightage on Dubai index, neared its lowest level in 52 weeks, closing 2.68 per cent lower at Dh3.99. Emaar Development closed 3.65 per cent lower at Dh3.43.

“Traders are selling real estate scrips thinking that the results might be weak,” said an analyst who did not wish to be named.

The Dubai Financial Market General index closed 0.56 per cent lower at 2,542.67, with strong pick up by Emirates NBD shares limiting the downside.

Emirates NBD closed 3 per cent higher at Dh10.3, while Gulf Finance House (GFH) was up 0.34 per cent higher at Dh1.07.

“GFH’s trend is gradually turning up with higher targets seen at Dh1.15,” Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities, said in a note. FABS had a technical buy at Dh0.93 on January 29.

Dubai Investments closed 4.58 per cent lower at Dh1.25.

The Abu Dhabi Securities Exchange closed 0.16 per cent lower at 5,112.15. Waha Capital tumbled to its lower circuit due to bad results. It closed 10 per cent lower at Dh1.62, Taqa closed more than 3 per cent lower at Dh0.92.

Saudi Arabia’s Tadawul index was 0.21 per cent lower at 8,615.26, after gaining 10 per cent since the start of the year. The index has been on an upward move due to a boost in foreign flows, estimated at $1.2 billion in January, compared to $1.6 billion for the whole of 2018.

“Saudi markets continue to focus on index inclusion stories. There has been a clear mismatch between performance of large cap (largely index inclusion stories) and mid & small cap names,” said Sanat Sachar, Equity Research Analyst — Asset Management at Al Mal Capital. “We believe the market will continue to focus on this theme till the actual inclusion in September 2019.”

Al Mal Capital expects to see some retrenchment in stocks “who have ran faster than their fundamentals and smart money will start focusing on companies with strong fundamentals”.

Saudi Basic Industries closed flat at 125.80 Saudi riyals, after gaining 24 per cent in the past one year. Another success story in the region has been Egyptian stocks in addition to the Tadawul.

“Egypt has been star performer of 2019 largely on the expectation of interest rate cuts as early as Q1-19,” said Sachar. “We believe interest rate cuts will be a great move for the country as this will revive the local consumption and kick-start the capital expenditure plan by the private companies. The valuations are quite attractive given strong demand drivers and stable political and macroeconomic environment.”

The EGX 30 index closed 0.15 per cent lower at 14,744.33, after gaining 13 per cent since January 1.