DFM third quarter net profit tumbles 70%

Dubai: Dubai Financial Market said yesterday its third quarter net profit fell sharply by 70 per cent, as revenues tumbled.

Net profit in the third quarter of 2015 reached Dh45.4 million, compared to Dh153.5 million in the third quarter of 2014, the DFM said in a statement.

“The trading activity has been affected by some immediate circumstances unrelated to the strong economy of the UAE,” Essa Kazim, Chairman of Dubai Financial Market said in a statement, adding “these circumstances included the declining oil prices and the concerns about the slowdown in China and its implications for the global economy.”

The traded value of shares listed on DFM decreased by 58 per cent to Dh132.2 billion during the first nine months of this year compared to Dh315 billion in the same period last year.

“The results are in line with our estimates, and the numbers are not a surprise,” said Sanyalaksna Manibhandu, Manager of Research, National Bank of Abu Dhabi Securities, who expected third quarter net profit to come in at Dh44 million.

Manibhandu expects lower trading value in the fourth quarter compared to third quarter. Investors would closely eye for stability in oil prices and interest rates in the United States before getting back to the market.

Total revenue decreased 49 per cent to Dh381.8 million during the first nine months of 2015 compared to Dh746.3 million during the corresponding period of 2014.

The revenue comprised Dh336.6 million of operating income and Dh45.2 million of investment returns. Company expenses reached Dh136.3 million by the end of September 2015 compared to Dh125.2 million in the same period of 2014. During the third quarter of 2015, revenue reached Dh89.2 million compared to Dh194.2 million in the third quarter of 2014, whilst expenses amounted to Dh43.8 million in the same period compared to Dh40.7 million.

In general, the trading value of the regional markets has decreased 28 per cent during the first nine months of this year. Although this trend has affected the revenue and profit of the company, DFM maintained its attractiveness to investors with foreign investors increasing their share in trading activity to 48 per cent compared to 43 per cent during the same period of last year, Kazim said.

Foreign investors were net buyers of Dh781 million and the number jumps to Dh1.3 billion when excluding Arabs and GCC nationals. Similarly, institutions were net buyers of Dh1.6 billion of shares.