Dubai: Dubai index witnessed its biggest daily percentage gain on the last trading day amid selective buying, but analysts say that this could be a start of more positive moves in 2019.
Emirates NBD and Aramex, which are typically illiquid stocks, with higher spread between bid and ask were the top gainers, leading to the nearly 2.5 per cent gain on the Dubai index,
The Dubai Financial Market General index closed 2.4 per cent up at 2,529.75. The previous biggest daily percentage gain of 2.29 per cent was seen in June 2017.
“It’s a corrective bounce, but it’s not bounce from where you can do bargain hunting. For a trend reversal we need to watch continued buying in other stocks to confirm this as a bottom along with a rise in volumes,” said an analyst who did not wish to be named.
The Abu Dhabi index also witnessed a big upmove. The Abu Dhabi Securities Exchange general index closed 1.9 per cent higher at 4,915.07. Waha Capital closed nearly 15 per cent higher at Dh2. Dana Gas closed 12.54 per cent higher at Dh0.96.
Outlook:
Analysts expect that any recovery on the Dubai index, which has underperformed the regional indices with 25 per cent losses, would meet with selling.
“Any recoveries if seen shall attract fresh sell-off and create pressure on markets,” Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities said.
The Abu Dhabi index which has outperformed the region with nearly 12 per cent gains may nudge higher because of merger talks led by Abu Dhabi Commercial Bank.
Abu Dhabi Commercial Bank has gained 20 per cent since January 1. Union National Bank has gained 23 per cent compared to 10 per cent gains on the ADX.
Al Mal Capital Menac fund has outperformed other indices by clocking 18 per cent gains in 2017 compared to 11 per cent on S&P 500 index and 6.8 per cent on the MSCI world index.
“While Middle East equities are often perceived as a highly volatile market where it is difficult to make money, it is interesting to see that the Al Mal Mena equity fund has been outperforming the vast majority of asset classes over the last two years, including US equities, global equities, EM equities, global bonds, oil and gold,” Al Mal Capital said in a note.
