Sell-off abates on UAE stocks with recovery in sight

Dubai: The sell-off in UAE equities abated on UAE stock markets on Tuesday along with oil, with some analysts expecting recovery in coming sessions.

The Dubai Financial Market General Index closed 0.73 per cent lower at 2,920.83, after losing more than 7 per cent since December 31.

“Oil is the main focus for direction in the regional equity markets. There is a little bit of rebound even Europe is up 2 per cent, said Tariq Qaqish, head of asset management at Al Mal Capital. “Saudi has also recovered, and it is less than 1 per cent, We might see strength in coming few days.”

On Tuesday, Brent crude neared the keenly-watched $30 per barrel mark only to bounce back from its early lows. Oil prices has shed more than 20 per cent since the start of the year on supply concerns.

“It’s hard to predict due to direction of the oil prices. Demand from global importer at the same time overall supplies are increasing. If oil prices don’t settle down we may see more pressure on equities,” Qaqish said.

However, technical analysts Osama Al Ashri, member of British organisation, Society of Technical Analysts, said Dubai index may witness more consolidation with support placed at 2,544.

Emaar Properties closed 3.17 per cent lower at Dh4.88, while Arabtec closed more than 4 per cent at Dh1.28.

Arabtec may go up before going down below Dh1, said Al Ashri, adding Emaar Properties may hit a new low at Dh4.67.

Gulf Finance House closed more than a per cent to end at Dh0.504. Gulf Finance House is waiting for a new high to resistance level Dh0.57 within a few weeks, said Al Ashri, adding Amlak Finance may hit resistance level of Dh1.37. Emaar Malls Group may hit a new low of Dh2.37 by next week, said Al Ashri.

Emaar Malls ended 1.20 per cent lower at Dh2.48.

Bargains:

“We can see good bargains especially in the banking sector. Al Mal Capital has cut the earnings for banks in 2016 by a fifth,” said Qaqish, adding “the multiples look attractive and investors need to be accumulating at current levels.”

“If oil prices settles down, geopolitical concerns abates, we can see markets gaining trust from investors,” said Qaqish.

Stocks like Emirates NBD, National Bank of Abu Dhabi and First Gulf Bank has shed a third of its value in the past one year.

Abu Dhabi Securities Exchange General Index may hit support level of 3,787 by next month, said Al Ashri. Aldar Properties may hit support level of Dh1.75, said Al Ashri, adding First Gulf Bank may hit support level of Dh10.70 by next week, and Dh10.50 by next month.

Abu Dhabi Securities Exchange General Index closed 1.4 per cent lower at 4,025.26. Aldar Properties closed more than a per cent lower at Dh2.12, while First Gulf Bank ended more than 2.5 per cent lower at Dh11.30.

Saudi’s Tadawul index closed 1.7 per cent lower at 6,068.75. “If the Tadawul index breaches the support level of 5,915, we may see support level of 5,500,” said Al Ashri, adding “Qatar index has a new target of 9,225. We would approach this area in the next few weeks.”

Qatar index closed 2.01 per cent lower at 9,477.09, while Kuwait exchange index closed 0.55 per cent lower at 5,357.62.

Muscat Securities MSM 30 index closed 0.90 per cent lower at 5,289.34.