Dubai stocks fell sharply on Monday as investors booked profits, expecting volatility in the days ahead of the Expo 2020 announcement.
The DFM General Index plunged 2.78 per cent, the most in more than two months, to close at 2822.71. The decline was across all sectors, including real estate, construction and financials. Of the 32 stocks traded, 27 retreated, three gained and two remained unchanged. The Index is still up 74 per cent for the year and is one of the five top performing markets globally.
“It’s mostly profit taking, which have impacted the market today,” said Sebastien Henin, portfolio manager at The National Investor, Abu Dhabi. “The market is still one of the best world performers after this correction. We should expect more volatility towards the end of the month, just before the Expo 2020 announcement. The market uptrend is still intact.”
Other analysts echoed the same view.
With no fundamental change in the picture, investors were trying to book profits at current levels, said Tariq Qaqish, head of asset management at Al Mal Capital.
“The DFM declined without the presence of any immediate driver or catalyst,” said Amer Khan, director at Shuaa Asset Management, “perhaps pointing to retail profit booking. For a market sitting on year to date gains of this size, a breather or correction is only healthy.”
Some, however, point to the concerns surrounding the Saudi Arabian projects of some of the construction companies, namely Drake and Scull and Arabtec which fell sharply, being impacted by what’s happening with the labour situation there.
Among the most active stocks in terms of value traded, Drake and Scull International, Emaar Properties and Arabtec were among the losing stocks. Drake and Scull shed 3.05 per cent to Dh1.27; Emaar dropped 3.44 per cent to Dh5.89 and Arabtec slipped 2.57 per cent to Dh4.10.
Gulf Finance House, Dubai Investments, Deyaar Development, Union Properties and Dubai Islamic Bank tumbled 3.75 per cent, 4.52 per cent, 2.65 per cent, 4.46 per cent and 2.66 per cent respectively.
In Abu Dhabi, the ADX General Index declined 0.91 per cent to 3811.60. Here too, majority of stocks fell. Of the 33 stocks traded, share prices of 25 decreased, six remained flat and two increased.
Among the high volume stocks, Aldar Properties declined 4.55 per cent to Dh2.52; Waha Capital lost 4.43 per cent to Dh1.51; Dana Gas shed 4.62 per cent to Dh0.62. Banking stocks, Abu Dhabi Commercial Bank and National Bank of Abu Dhabi fell 0.59 per cent and 1.64 per cent respectively. Etisalat and First Gulf Bank remained unchanged at Dh11.70 and Dh16.30.
