Lack of catalysts keeps UAE stocks nearly flat

Dubai: A lack of catalysts coupled with low trade values kept the UAE’s main equity indices nearly flat on Sunday, with expectations for Dubai’s stocks still on the bearish side.

The Dubai Financial Market (DFM) index inched down 0.09 per cent to close at 2,761.94, still below the keenly watched support level of 2,800, which signalled room for further downside. Trade values were a mere Dh133.7 million.

Most stocks’ share prices were little changed, too. Emaar share prices slid 0.21 per cent, as Deyaar rose 0.89 per cent, and Union Properties gained 0.59 per cent.

Tariq Qaqish, managing director of Menacorp’s asset management division, said that investor confidence was low, accounting for the weak sentiment in the market. Sentiment on the Dubai bourse, especially, has been negative for long, with the DFM index down over 18 per cent year-to-date.

“(The sell-off in) emerging markets was one of the factors hurting DFM, but going back for almost a year now, it’s been stagnant because of corporate governance issues, mismanagement cases, big losses, which have all led investors to put their money on the side,” he said.

Asked when the Dubai bourse might see a rebound, Qaqish said there needs to be a “substantial” catalyst to drive investor confidence and liquidity. Such catalyst should be higher government spending, which would spur buying activity in the country’s financial markets, he said.

From a technical perspective, an analyst note from First Abu Dhabi Securities said the DFM index could see a corrective bounce towards the 2,800-2,855 level, after which the index will face renewed selling pressure.

Elsewhere in the UAE, the Abu Dhabi Securities Exchange (ADX) general index inched up 0.18 per cent to close at 4,892.16. Most stocks were also little changed, with trade still concentrating on heavyweights in the banking and real estate sectors.

Etisalat rose 0.5 per cent, as both Aldar Properties and First Abu Dhabi Bank ended flat. Abu Dhabi Islamic Bank gained 0.28 per cent while Abu Dhabi Commercial Bank ended 0.91 per cent higher.