Traders at Dubai Financial Market (DFM).
The Dubai Financial Market general index has outperformed other regional indices such as the Tadawul index and the ADX. Image Credit: Gulf News Archives

Dubai: Lagging stocks may see a catch-up on the Dubai index after witnessing as indexed and other heavy weight stocks neared their resistance level.

The Dubai Financial Market general index has gained 15 per cent in the year so far, breaching the critical resistance, outperforming other regional indices such as the Tadawul index and the Abu Dhabi index.

This rally has been buoyed by most of the indexed and heavy weight stocks such as Emaar Properties and its units, Deyaar Properties and others. Emaar Properties has gained 38 per cent since January 1 and hit its highest level in 52 weeks, while Emaar Malls shares have gained 18 per cent since the start of the year. Damac has gained 25 per cent from its low of Dh0.824 seen on May 28.

Though we expect markets to continue the uptrend after Eid holidays, it is natural to see some profit taking.

- Vrajesh Bhandari | Senior portfolio manager with Al Mal Capital

However, in terms of performance, stocks such as Tabreed, Gulf Finance House, Air Arabia, Dubai Investments, Dubai Islamic Bank, Aramex and Union Properties have been lagging and analysts say it may be a good time to move into those stocks after the break.

Union Properties shares have shed 7 per cent since January 1, and Air Arabia shares have gained 9 per cent since the start of the year. Dubai Islamic Bank has gained 12 per cent in the past 12 months.

7%

Decline in share price of Union Properties so far this year

“Our 2019 positive stance on UAE markets stands vindicated. Though we expect markets to continue the uptrend after Eid holidays, it is natural to see some profit taking and so we advise clients to let the share price consolidate before further building positions. Investors also need to be selective their picks and buy (high quality companies) on dips,” Vrajesh Bhandari, senior portfolio manager with Al Mal Capital told Gulf News.

Aramex shares have gained 2 per cent since the end of last year. “Traders may look to add buy positions in Aramex at current levels for a target of Dh4.54/4.80 in the medium term,” said Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities in a note.

Traders may look to add buy positions in Aramex at current levels for a target of Dh4.54/4.80 in the medium term.

- Shiv Prakash | Senior analyst with First Abu Dhabi Bank Securities

On Thursday, traders resorted to selling in banking shares on Abu Dhabi bourse after the US Federal Reserve cut its fund rate by 25 basis points.

First Abu Dhabi Bank fell 1,76 per cent to end at Dh15.6. Abu Dhabi Commercial Bank closed 1 per cent lower at Dh8.91.

9%

Increase in share price of Air Arabia so far this year

Others also witnessed a sell-off. Arabtec closed 0.56 per cent lower at Dh1.76. Banks have been outperformers due to news on mergers and acquisition.

Saudi Arabia’s Tadawul index was nearly 1 per cent lower at 8,647.25. The Muscat MSM 30 index closed 0.43 per cent higher at 3,776.83.