UAE market lacks the drive to bounce back

Abu Dhabi: UAE stocks witnessed relative stability this week, following the steep declines of the past two weeks, with the emirates securities general index gaining 0.39 per cent to end the week at 4189.26 points.

In Dubai, the benchmark index advanced by 0.25 per cent to 379.6 points, while Abu Dhabi's general index gained 0.21 per cent to close at 3142.42 points.

However, the volumes and values of traded shares declined substantially by 12.5 and 22.7 respectively, indicating a weak demand, and, as many analysts hope, an end to the downturn trend.

The services sector was the most traded in terms of value accounting for 82.7 per cent of the transactions according to the weekly report of Amanah Capital.

du was the most traded share accounting for 31 and 25 per cent of the volumes and values of the total traded shares respectively.

"What is obvious is that the market lacks for the necessary driving elements," said Mohammad Ali Yasin, manager of Emirates Securities, referring to speculators and major portfolios.

"They seem to be observing the market without pumping the sufficient liquidity, awaiting an obvious state of stability," he added.

Small investors tended to tie up their selling and purchase decisions to the Saudi stock market, believing that the UAE markets will follow suite. "

That is a very naïve perception, as such corallation is limited and can be lasting for a few days, but not in the longer term," Yasin explained.