Dubai: Stocks on the Dubai Financial Market had turned volatile before steadying on Sunday as investors factored in full-year results from state-owned airline Emirates and their COVID-induced outlook.
Dubai Financial Market (DFM) index slipped 1.09 per cent to 1,901 points, while Abu Dhabi Securities Exchange (ADX) rose 1.4 per cent to 4,100 points.
Declines on the DFM widened as much as 2.6 per cent in a largely volatile trading session, bogged down by initial declines seen across most sectors. Shares of Emaar Properties, Emirates NBD, DIB, Aramex and Air Arabia led the pack in declines where 28 stocks fell market-wide, while just 4 stocks rose.
Emirates Group, which operates the world’s largest long-haul carrier, reported a 28 per cent decline in full-year profit as the impact of the coronavirus cut into earnings in March. The pandemic cost the airline over Dh3.4 billion in revenues during the month.
Emirates Airline and Group Chairman Sheikh Ahmed bin Saeed Al Maktoum said he does not see air travel returning to normal for at least another 18 months, and warned that the COVID-19 would have a major effect on the coming year’s performance.
Peer and low-budget carrier Air Arabia dropped as much as 3.8 per cent, before clawing back some of its losses to trade down 1.9 per cent. On Thursday, Aramex posted a 38 per cent plunge in its first-quarter net profit.
UAE bourses closed lower last week with the DFM index losing 5.1 per cent and the ADX down 4.0 per cent. The S&P Pan Arab Composite index recorded a weekly loss of 4.5 per cent.
Earlier losses were led by market heavyweights as investors locked in gains from the previous week, explained Aditya Pugalia, director of financial markets research at Emirates NBD.
However, Middle East counterpart and the region’s largest bourse - Saudi Arabia’s Tadawul – rose 0.9 per cent on Sunday, after a near 7 per cent drop seen on a weekly basis, partly supported by Friday’s gains in oil prices and a 0.5 per cent increase posted by the stock of state-owned oil behemoth Aramco.
“Regional markets were unable to sustain the positive momentum from last week even as oil prices continued to rally,” Pugalia added. “It is worth noting that much of the losses came in the early part of the week when global sentiment was weak too.”
On Friday, Brent crude settled up $1.51, or 5.1 per cent, at $30.97 a barrel after US producers cut output with the number of drilling rigs falling to a record low, and as more states moved ahead with plans to relax lockdowns.