UAE stocks snap bullish run as investors take a breather
Company results and dividends spook investors
Dubai: Abu Dhabi and Dubai stock markets eased back after two back-to-back gains lured investors into encashing their positions. The financial stocks led the losses after rallying in the last sessions.
Abu Dhabi Securities Exchange traded 0.4 per cent lower to 5,675 points. The index is still up 12.5 per cent for the year and has outperformed all its peers in GCC countries.
Banking stocks led the losses with Abu Dhabi's largest lender First Abu Dhabi Bank shedding 0.9 per cent to close at Dh14.9 a share.
Results disappoint
National Bank of Ras Al Khaimah dropped 3.8 per cent to Dh3.8 a share. The lender's full-year net profit slumped 54 per cent to nearly Dh505 million reflecting the impact of the pandemic on its customer base and overall economy. The bank announced a dividend of 15 fils per share amounting to just half of the cash profit it distributed to its shareholders a year before.
Wednesday's drop marks its third consecutive fall leading the stock back into the red so far this year. The stock had lost its value by around 18 per cent last year as, like many other stocks, it bore the brunt of sweeping coronavirus effects. At some point, it looked emerging out of the 2020 slump gaining some 9 per cent earlier this year riding on the wave of optimism that prevailed as prospects brightened for a quicker turnaround in economic activity. But new variants of coronavirus surfaced taking away the early gains and pushing the stock in negative territory.
Dubai Financial Market aslo edged down 0.4 per cent to 2,713 points. Its top lender Emirates NBD retreated 1.3 per cent after a couple of back-to-back gains, and traded at Dh11.7 a share at close.
Dividend woes
Dubai stock exchange operator Dubai Financial Market Company dropped 4.8 per cent to Dh1.2 a share, with the plunge being the worst biggest single-day performance so far this year. The stock has been one of top performing Dubai companies this year. It shot up to around 39 per cent at one point getting the full support from the overall bullish run that the Dubai market has enjoyed on the back of mass vaccination campaign.
However, the investors appeared totally disappointed as the company failed to pay out any full-year dividends despite posting a 14 per cent rise in the profit. The stock is still trading 27 per cent up for the year.