Selloffs wipe Dh27.6b from UAE markets

Abu Dhabi: Sellers dragged the UAE market indices down substantially this week, wiping out more than Dh27.6 billion in market capitalisation.

The losses were stronger on the Abu Dhabi Securities Exchange (ADX), where market capitalisation fell by Dh19 billion and the general index plunged four per cent to 4,773.98, losing more than 50 per cent of the gains accumulated in 2008.

The index is 4.9 per cent higher than its level on December 31, 2007.

The losers included all the leading shares such as etisalat, First Gulf Bank (FGB), National Bank of Abu Dhabi (NBAD), and Aldar Properties.

The Dubai Financial Market (DFM) fared no better, with the general index retreating 2.87 per cent to 5,250.31, its lowest level since July, accumulating 11.5 per cent worth of losses since the beginning of the year. Union Properties, Arabtec, and DFM were among the worst performers this week.

Support levels

"We are now testing critical support levels for both markets, especially ADX which reversed its course in the short and medium terms to a downtrend," said Ahmad Abdul Rahman, head of research at Amanah Financial Services.

The value of traded shares increased tangibly by 35 per cent with a daily average of Dh1.5 billion in transactions.

In Dubai, Emirates Takaful was the heaviest traded accounting for 17 per cent of the total value of trades in Dubai. The Islamic insurance company ended the week 14.5 per cent higher at Dh4.58.

Meanwhile, buyers and investors seem to have abandoned ADX which reported a total value of transactions that did not exceed Dh2.4 billion throughout the week.

Overall, the Emirates Securities general index dropped 3.31 per cent to 5,802.20, influenced by the substantial losses recorded by banking and real estate sectors.

The banking sector lost Dh10.5 billion, on account of the decline in FGB, NBAD, and Abu Dhabi Commercial Bank shares by Dh6.4 billion.

The real estate sector lost Dh8.5 billion, owing mainly to Aldar and Sorouh Real Estate losing Dh4 billion and Arabtec losing more than Dh1 billion.

The telecom sector was also among the worst performers with etisalat and du losing Dh4 billion in market value.