UAE stocks tread water as China sell-off ebbs

Dubai: UAE equity markets were almost flat on Wednesday as improved sentiment in Chinese markets after its trade data soothed frayed nerves.

The Dubai Financial Market General Index closed 0.03 per cent higher at 2,921.70, after moving in a tight range of 2,916.48-2,956.63.

“With medium- and long-term charts having strengthened the negative picture with the latest attempt to break to a new 52 week low, traders are advised to remain neutral and wait for a stronger indication of a bottom in the market before targeting a stronger correction on Dubai index,” Menacorp said in a statement.

“The only thing that changed in the past 24 hours is the fact that China is able to hold its currency, and there wassn’t a further dive, and we had better trade numbers from China,” said Sanyalaksna Manibhandu, Manager of Research, National Bank of Abu Dhabi Securities.

Better than expected trade data from China cooled growth concerns over the world’s second biggest economy post a massive sell-off that started last week. Chinese main gauge shed more than 7.5 per cent in the sell-off since the start of the year, while oil shed a fifth of its value in the same period.

“Shanghai was still down 2.4 per cent on Wednesday despite the Chinese data, so I don’t think we are out of the woods as yet,” said Manibhandu, adding “investors would trade very very short-term and no one would think long term at current levels.”

In stocks specific movements, Arabtec ended at Dh1.27, down 0,78 per cent, and was the most active stock in trade.

“Arabtec is one explanation as to why volumes are better on DFM as people are taking more risk,” Manibhandu said. On Wednesday, volumes jumped to Dh400 million compared to Dh250 million a few days ago.

In other stocks, Emaar Properties ended 0.41 per cent lower at Dh4.86. Gulf Finance House closed 1.19 per cent higher at Dh0.510, while Amlak Finance closed 0.79 per cent lower at Dh1.26.

“Having in mind the given bearish characteristics, long term traders should remain neutral at current times in Emaar Properties with the aim to reposition only after stronger trending characteristics appear on long term charts,” Menacorp note added.

Dubai Islamic Bank ended 0.18 per cent higher at Dh5.59, while Air Arabia ended 1.56 per cent higher at Dh1.30. Out of a total of 34 stocks traded on the exchange, shares of 18 firms rose, while shares of 12 others fell.

Inward:

Emirates NBD would report its fourth quarter and yearly results next week, and that would trigger investors to start to look more inward.

“There would be news from companies to price in. So in a situation, when there is not much going in the rest of the world and companies in the UAE surprise on the upside. That would be a potential for a rally,” said Manibhandu, adding “there could be further falls if companies come out with worst than expected numbers.”

In Abu Dhabi, the general index ended 0.13 per cent lower at 4,020.22.

“The long term picture remains in a range with bearish momentum prevailing and reaching the lower boundaries,” the note from MENACORP said.

Aldar Properties closed 0.47 per cent higher at Dh2.13, while Dana Gas fell 2 per cent to end at Dh0.49. Abu Dhabi Commercial Bank closed 1.80 per cent higher at Dh5.65. Etisalat ended steady at Dh16.20.

Out of a total of 25 stocks traded on the exchange, shares of 6 firms rose, while shares of other 10 firms declined.