Dubai: Dubai stocks closed lower for a second day running to be heading towards fourth consecutive weekly losses amid subdued recent earnings and doubts about GCC economic activity getting back to normal anytime soon.
"Higher oil prices and significant progress with Covid-19 vaccine rollouts support our view that the outlook for the GCC economies this year is brighter," said Emirates NBD Research in a note. However, it added budget deficits were likely to remain substantial, limiting the scope for additional fiscal stimulus to support a recovery.
Dubai Financial Market gave up early gains to trade 0.6 per cent lower at 2,594 points with industrial and financial stocks weighing the most. Dubai Islamic Bank dropped 1.5 per cent to close at Dh4.7, a multi-week low touched as the lender traded lower or flatlined in every session since February 3. On Tuesday, it posted its sharpest single-day drop year-to-date after its latest earnings fared well below analyst expectations.
Its full-year dividends, though, outperformed forecasts, they lagged compared to a year earlier. But what appears to worry the investors in particular was massive provisioning it took on during the last year, which could partially be linked to its exposure to NMC Healthcare.
The stock rose as much as 11.7 per cent at its peak during the year as investors looked beyond the virus on hopes that fast-track vaccine rollout in the country will put the economic wheel back on track and sooner. But resurgence of new coronavirus variants in parts of the world and following social and economic curbs came in to dampen those hopes.
Heading towards worst week
The stock has ended the last two weeks in red and if it fails to make a sharp turnaround on Thursday, this week will prove its worst since mid last year.
Abu Dhabi Securities Exchange pointed lower by 0.5 per cent closing at 5,636 points. Abu Dhabi National Energy dropped 2.8 per cent to Dh1.39 extending its lackluster performance to a third day after posting lower full-year profits and revenues.
Earnings also dragged Emirates Insurance that plunged 4 per cent on its first trading day after reporting a drop in full-year profits to Dh108.3 million mainly as its gross written premium declined by 9 per cent to Dh1.04 billion.