Dubai: Every trader dreams of building up positions in cheaper yet quality stocks but for those on the Dubai Financial Market (DFM), that time is not now.
The DFM general index, which has shed 10 per cent from a high of 2,820 on April 22, declined 3.97 per cent to end Monday’s session at 2,525.61.
Despite declining 8.62 per cent on a year-on-year basis, the index has only shed a marginal 0.8 per cent from the beginning of the year.
“We saw the gains built up in the past two months go away in just two days. The problem now is that there are many factors at play such as geopolitics, margin pressure [and] technical parameters. So now may not be a good time to enter but traders should wait and watch and see if the index breaches the 52-week low of 2,429,” said an analyst who did not wished to be named.
Emaar Properties was trying to sustain above the keenly watched Dh4 mark as sell positions triggered margin pressure. Emaar Properties, the bellwether, closed 5.88 per cent lower at Dh4.16.
The volume of share to change hands jumped to 13 million shares, compared to a daily monthly average of four million.
Emaar Properties may see further bearish move towards the previous low of Dh3.85, Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities, said.
Dubai Islamic Bank, another heavyweight stock, fell 3.33 per cent to end the day at Dh4.94.
Going ahead, the strategy should be to wait and watch, analysts say.
“Whether markets will bounce back tomorrow is tricky to forecast as the issue is mainly geopolitics. But if one assumes things to not escalate from here, then it can be a good time to slowly build up position in the quality names that are cheaper post this sell-off,” Nishit Lakhotia, head of Research, SICO Bank said.