Abu Dhabi: The UAE’s equity markets rallied on Wednesday after seeing strong sell-offs in the past few sessions.
The Dubai Financial Market rose 0.47 per cent to end the day’s trade at 3,315.84 while the Abu Dhabi Securities Exchange (ADX) general index went up 0.3 per cent to reach 4,211.69.
The DFM saw a total of just above Dh500 million in trade value, which, while still relatively weak, is a significant jump from the trade values seen in the past weeks. However, Dh104.5 million of this value went to Arabtec alone whose shares fell 5.07 per cent on the back of over Dh1 billion in losses reported on Wednesday.
Mohammad Yasin, managing director of the National Bank of Abu Dhabi Securities, said that the lower weight of Arabtec on the DFM index has helped the market avoid a major plunge.
“The recovery today of 0.4 per cent is still less than the drop we saw in the past few sessions, and we need continuity of this kind of recovery and mood on the technical and fundamental fronts. The market is lacking direction,” he said.
Yasin added that the market is yet to bottom out despite valuations already being attractive, and that he expected it would be some time before long-term investors return to the market.
“I don’t think we’re out of the woods yet. We still need a few more sessions to change that negative momentum. [Thursday] is going to be an interesting session because the index has been testing the 3,400 level, so if we can close above that, it will be a signal of positive momentum. What I see going forward is that our markets are going to be more volatile,” he said.
The DFM index started the day with a drop from around 3,275 to a low of just below 3,250 in the first few minutes of trade on the back of a nine per cent drop in Arabtec’s share prices.
The index managed to bounce back, however, and slowly rose to its closing level in the next hours of trade.
In Dubai, most powerhouses ended in the green as Emaar rose 3.33 per cent, Damac Properties gained 1.42 per cent, Dubai Islamic Bank went up 0.33 per cent, and Amlak jumped 9.33 per cent. Air Arabia was also up 2.52 per cent.
In the capital, Sharjah Cement and Industrial Development Co. topped the gainers’ list with a 10.1 per cent increased, followed by Dana Gas with 2.38 per cent, Etisalat with 2.3 per cent, Abu Dhabi National Hotels with 1.82 per cent, and Agthia Group with 1.72 per cent.
Meanwhile, Saudi Arabian stocks rallied the most in emerging markets, led by the country’s biggest telecommunications company following a three-year pledge on dividends. The Tadawul index jumped over two per cent, the most in over a month, to reach 7,128.28.
Shares in Saudi Telecom Co. had their biggest jump since December, surging as much as 9.8 per cent after the company said it would adopt a one-riyal-per-share fixed quarterly dividend for the period.
Saudi Arabia’s stock market, which in June opened to direct foreign investors for the first time, has dropped by more than a quarter in the past 12 months amid a collapse in oil prices.
Of the 38 stocks traded on DFM, 20 went up, 12 went down, and six remained unchanged. Of the 29 stocks traded on ADX, 10 advanced, 14 declined, and five remained flat.
— With inputs from Bloomberg
