UAE and other Gulf stocks underwent selling pressure in early trades after new waves of COVID-19 in some systemically important countries led to fresh lockdowns and stoked fresh investor fears about global economic recovery. Equity markets elsewhere are already reeling from the selloffs.
Abu Dhabi Securities Market dropped 0.5 per cent to 6,124 points, giving up some of the gains from yesterday. The volatility is expected to stay on for the short-term as investors turn cautious and wait to seize each opportunity to book profits on their positions.
Banking stocks acted as the biggest drag, with First Abu Dhabi Bank slipping 0.8 per cent ahead of the board of directors meeting later in the day to approve first-quarter results. The lender posted a double-digit drop in 2020 full-year bottom-line, but the UAE market has since returned to growth path.
Abu Dhabi's largest lender is reckoned to have gained in quarterly profit figures, going by the numbers from blue-chip Dubai banking stocks. But investors apparently want to see the numbers before they put their money into the stock.
Others to drop were Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, Aldar Properties and Etisalat, which all came under selling pressure as the recent rally lured investors to encash their holdings.
Dubai Financial Market dipped 0.2 per cent to 2,619 points with real estate stocks leading the losses and financial shares joining in the bearish mood. Emaar Properties sagged 0.5 per cent, dropping for a second day after going ex-dividend, while Deyaar Development and Union Properties also traded down. Almak Finance and Dubai Islamic Bank retreated, with most other stocks trading unchanged.
Ex-dividend is a factor
Qatar Exchange traded 0.5 per cent lower at 10,859 points, weighed down by Baladna and Mazaya Real Estate stepping back as they are trading ex-dividend. Barwa Real Estate drifted lower after failing to make a strong comeback in the first quarter, during which its profit numbers ticked up marginally to QR190 million. Qatar Navigation and United Development traded on the backfoot ahead of their results planned for later in the day.