The Dubai Financial Market
The Dubai Financial Market Image Credit: Pankaj Sharma/Gulf News

Dubai: The Saudi Tadawul index tumbled on Sunday as traders took profit off the table ahead of Ramadan as banks were hardest hit, but analysts say that any more fall could be a buying opportunity.

The Tadawul index fell as much 2.07 per cent or 9,142.09, the level last seen on April 16, before trading 1.66 per cent lower at 9,181.92.

“Post the FTSE 2nd tranche and beginning of Ramadan, it is not surprising that Saudi Arabia is weak,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital, told Gulf News.

Banks were hardest hit in trade. Al Rajhi Bank closed 2.53 per cent lower at 73.3 Saudi riyals. Traded volume stood at 4.8 million shares, almost equal to the 30-day average of 5 million shares. National Commercial Bank also fell 2.97 per cent to be at 62.7 riyals. Saudi Basic Industries fell 1 per cent lower at 121.60 riyals.

The Tadawul index has been the top performing regional equity index with 18.9 per cent gains so far in the year. The market is waiting for the MSCI upgrade to get implemented in June after the two tranches of buying due to the FTSE emerging market index inclusion.

Image Credit: Gulf News

“If the market falls further, retail investors may soon start to ‘buy the dip;, given bulk of the passive flows are yet to get effected,” Bhandari said.

In the UAE, shares of Salama, Aman, Dar Al Takaful surged on rumours of a possible merger. It was not immediately known which companies would be merged. Salama Insurance rose to its daily limit of 14.86 per cent to end at Dh0.626.

“Traders may look to re-enter Salama for a target of Dh0.80/0.70,” Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities, said. FABS had a buy on the stock at Dh0.47 on March 8. Aman Insurance ended 13.64 per cent higher to be at Dh13.64. In other stocks, Emaar Properties lost 0.63 per cent to end at Dh4.72. Dubai Investments closed 2 per cent lower to be at Dh1.37.

“In the UAE, we see some speculative names coming off, as traders cut exposure going into the summer. Also, stocks that have done well on a year to date basis, risk some profit taking,” Bhandari said.

Fresh buying was seen in banking stocks in the UAE. Dubai Islamic Bank closed 1.36 per cent higher to be at Dh5.23. Abu Dhabi Islamic Bank closed 1 per cent higher at Dh4.71. The Abu Dhabi Securities Exchange general index closed 0.31 per cent lower at 5,226.46.