Dubai: The Abu Dhabi bourse’s main index fell 1.17 per cent on Wednesday amid profit-taking activity following strong gains over the past two weeks.
The index ended the day at 4,934.44, inching away from the 5,000 mark it had been slowly approaching over the last two trade sessions. The decline in the index was led by heavyweight Etisalat whose share price fell about 1 per cent.
Shiv Prakash, senior research analyst at First Abu Dhabi Bank, said that the Abu Dhabi Securities Exchange (ADX) index is outperforming, and could see further gains.
“Banking stocks continue to hold over the support levels and may attract further buying. Any close over the 5,000 mark shall ignite fresh buying towards the next resistance at 5,200,” he said via email.
Banking stocks have been attracting buying activity lately after Abu Dhabi Commercial Bank and Union National Bank said they were in early talks about a possible merger.
Meanwhile, the Dubai Financial Market (DFM) index slid 0.82 per cent to end at 2,809.87 as trade values dwindled ahead of a long weekend in the UAE’s markets.
Drake and Scull was the most actively traded stock on the bourse after the company invited shareholders to a meeting to discuss whether it will dissolve its business or not. DSI share prices dove 10 per cent, bringing its year-to-date decline to around 82 per cent.
FAB’s Prakash said the support level for the DFM index is at 2,800 — just nine points away from Wednesday’s close — and if broken, may attract further selling towards the 2,730 level.
And that appears to be the likely scenario for the Dubai index, after Emaar Development said in a statement after trade hours that it will submit a proposal to distribute a special cash dividend of 26 fils per share. The figure is about half of what markets had anticipated, with expectations of 52 fils per share.
Prakash said the announcement is expected to trigger selling activity on the stock on Sunday when the market re-opens.
Elsewhere on DFM, most stocks ended in the red, with GFH Financial Group down 2.78 per cent, as Dubai Islamic Bank slid 0.96 per cent. Salama Insurance also fell 3.7 per cent while Union Properties ended 3.31 per cent lower.