Dubai: The Dubai index raced ahead to outperform the Abu Dhabi and other regional indices, and this trend may continue in the short-term.
The Dubai index gained 7.4 per cent so far in February, outperforming 2.4 per cent gains on Abu Dhabi index. Saudi Arabia’s Tadawul index shed half a per cent in the same time period.
“Abu Dhabi did very well last year on the back of FAB and ADCB. There are many companies in the banking and real estate sector in Dubai, which are currently undervalued in Dubai, and may do well,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital said.
The Dubai index may gain 6 per cent in the short-term, while the Abu Dhabi index may nudge 2 per cent higher, according to Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities. “The breach of a key barrier of 2,570 attracted fresh flow of funds into select outperformers. The near-term trend turned bullish towards the initial target at 2,700 then may target 2,850 in the short term,” Prakash said in a note.
The Dubai index has been accumulating gains due to buying in real estate stocks after the fourth quarter results. Emaar shares were considered as undervalued stocks to their peers in the region.
Analysts cited Emaar Properties, an underperformer losing 22 per cent in the year so far. Traders started accumulating long positions in the stock after the company posted more than 30 per cent increase in fourth quarter net profit.
The bullishness in Emaar Properties is also positively impacting other real estate companies. Union Properties closed 2.89 per cent higher at Dh0.391. Damac Properties closed 8 per cent higher at Dh1.42.
Abu Dhabi did very well last year on the back of FAB and ADCB. There are many companies in the banking and real estate sector in Dubai, which are currently undervalued in Dubai, and may do well.
Gulf Finance House closed 1.54 per cent higher at Dh0.990. “We expect further recovery towards Dh1.03/1.08 in the near term,” Prakash said. Emirates NBD, Gulf Navigation shares fell. Emirates NBD closed 0.97 per cent lower at DhDh10.20. Dubai Islamic Bank closed at Dh5.17, up 0.39 per cent higher.
The Abu Dhabi Securities Exchange general index closed 0.82 per cent higher at 5,139.67. Abu Dhabi index is strongly supported at 5,020 levels. “The Abu Dhabi index is headed towards 5,130/5,250 in the medium term,” Prakash said.
First Abu Dhabi Bank closed 1.74 per cent higher at Dh15.22. Union National Bank ended 0.92 per cent higher at Dh5.50. Etisalat ended 0.35 per cent lower at Dh16.94. Al Dar Properties ended 1.68 per cent higher at Dh1.82.
Saudi Arabia’s Tadawul index closed 0.40 per cent lower at 8,513.27. Most of the losses came from energy and capital good indices. Al Rajhi Bank closed 0.99 per cent lower at 99.80 riyals, while Saudi Basic Industries Corp. closed 0.65 per cent lower at 122.60 riyals. Dar Alarkan Real Estate Development Co. ended 2.74 per cent higher at 10.50 riyals. Saudi Kayan Petrochemical Co. closed 1 per cent higher at 13.80 riyals. Elsewhere in the Gulf, the Muscat MSM 30 index closed 0.05 per cent lower at 4,053.36. The Qatar exchange index closed flat at 10,190.14. The Kuwait all share index closed 0.36 per cent higher at 5,251.07. The Bahrain index ended 0.76 per cent higher at 1,415.46.
Foreigners net buyers on Saudi’s Tadawul
Foreigners were net buyers in the week to February 21, according to a statement from the bourse.
Foreigners purchased 1 billion Saudi riyals worth of shares in that week to February 21, and sold shares worth 581 million riyals, making them a net buyer of 442 million riyals worth of shares. Saudi retail were net sellers in this week, while institutions purchased and sold the same value of shares.