Abu Dhabi: The Dubai Financial Market (DFM) index fell 0.85 per cent on Monday to end the day’s trade at 4,554.58, while the Abu Dhabi Securities Exchange (ADX) general index rose 0.27 per cent to reach 4,862.34.
Construction giant, Arabtec, continued its gains that started at the beginning of this month, climbing 3.96 per cent on Monday to reach a share price of Dh4.2. Shares started the day at a price of Dh4.07, and inclined during the first 15 minutes of trade to reach a high of Dh4.39 at 10.15am. Prices continued to fluctuate throughout the day, reaching a minimum of Dh4 at around 10.45am.
The drop in Arabtec share prices at 10.45am dragged the DFM index from its starting figure of 4,590 to 4,486.23 — its lowest of the day.
With over Dh1.58 billion worth of trade, Arabtec made up 58 per cent of the total trade value on DFM.
Other powerhouses in Dubai, however, ended the day in the red. Union Properties fell 3.5 per cent, Dubai Investment Co dropped 3.46 per cent, Deyaar Developments decreased 1.69 per cent, and Emaar went down 1.07 per cent.
Marwan Shurrab, fund manager and head of trading at Vision Investments & Holdings, attributed the drop in DFM to profit-taking activity by investors who were trying to make up for their losses from last month’s performance.
“I think Ramadan has proven to be not as slow as people expected. It started off with aggressive sell-off due to speculation on Arabtec and on market conditions. Now, we’re seeing strong volatility due to the same reasons of speculations on Arabtec and on the market,” he said.
Shurrab added that there are currently no catalysts to drive the market, and thus, it is hard to forecast stock performance. However, upcoming disclosures of financial results for the second quarter of the year are expected to ease off volatility.
Discussing Arabtec, he said, “Arabtec accounted for 60 per cent of trade value. To have such a turnover on one stock, and not for one session, [but] for almost six sessions, [is not] healthy. This gives room for traders and manipulators to enter the market and benefit from volatility, rather than long-term investors that would be much healthier for the market.”
As for ADX, Shurrab said the market also saw profit-taking activity, but has not been as volatile or aggressive as DFM.
Of the 33 stocks traded on DFM, 17 went down, 14 went up, and two remained unchanged. Of the 36 stocks traded on ADX, 18 advanced, 13 declined, and five remained flat.