Dubai: Abu Dhabi’s main bourse index jumped 1.39 per cent on Monday driven by gains on banking stocks, which continued to rise on news of a possible merger.
The Abu Dhabi Securities Exchange (ADX) general index ended at 4,986.28 as it continued to flirt with the keenly-watched 5,000 level, which was touched last week during intraday trading. The rise was supported by buying activity on Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB) after they said last week they were in early talks for a possible merger.
On Monday, UNB’s share prices jumped 4.82 per cent and were the most actively traded on ADX, while ADCB’s rose 2.21 per cent. First Abu Dhabi Bank (FAB) also gained 3.23 per cent.
“It’s a continuation of the trend that we’ve seen since the start of the year where the banking sector continues to perform [well], and the recent news of consolidation within the banking sector acting as a catalyst to unlock value within the sector, especially so in a rising interest rate environment,” said Saleem Khokhar, head of equities at First Abu Dhabi Bank’s asset management group.
But while Abu Dhabi’s index and its banking stocks continue to gain, it’s a different story in Dubai where the main index is down 15.4 per cent year-to-date. The Dubai Financial Market (DFM) index on Monday ended 0.24 per cent higher at 2,849.41 as it continued to move sideways.
Trade values saw an improvement, though, rising to Dh459.6 million, with 29 per cent of that going to Salama Insurance Company whose share prices jumped 12 per cent. Salama led gains on DFM and was the most actively traded stock.
“The Dubai index has underperformed, there is no doubt. When you look at the components of this underperformance, you see a majority of it coming from the real estate sector. What we’re looking for is confidence to return to the real estate sector, which will take some time,” Khokhar said.
He pointed that there were some undervalued assets at the moment, and that the property market was “pretty close to the bottom.”
Elsewhere on DFM, Deyaar jumped 5.92 per cent, as Emaar inched up 0.4 per cent, Dubai Islamic Bank rose 0.19 per cent, and GFH Financial Group increased 2.11 per cent.