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ADX index jumps 1.8% after new government measures

Rise in ADX follows 2% decline on profit-taking activity

Gulf News

Dubai

The Abu Dhabi Securities Exchange (ADX) general index climbed 1.76 per cent on Thursday to end at 4,714.73, following the latest measures announced by the government to boost the private sector.

The government said on Wednesday evening that it will relax visa requirements for employees, a move that is expected to release Dh14 billion back to companies in the private sector.

The rise in the ADX index on Thursday also comes a day after it plunged over 2 per cent as investors booked profits ahead of the Eid Al Fitr holiday.

“I think investors are more optimistic about the future of the UAE economy especially that the government is taking proactive measures to stimulate the economy,” said Tariq Qaqish, managing director of Menacorp’s asset management division.

“Previously, the public sector was driving the economy, but now the government is looking towards stimulating the private sector.”

The decision on Wednesday follows other economic plans announced this month including a Dh50-billion-stimulus-package for Abu Dhabi that aims to increase the ease of doing business and boost growth.

On ADX, blue chips benefited from the buying activity, with etisalat share prices rising 2.13 per cent to Dh16.75, as First Abu Dhabi Bank rose 3.27 per cent to Dh12.65.

Meanwhile, the Dubai Financial Market (DFM) index slid 0.42 per cent to 3,038.23, as powerhouses dragged the index down. Emaar fell 0.88 per cent while Dubai Islamic Bank, the most actively traded stock, remained flat at Dh5.1.

Traded value on the DFM strengthened to Dh302 million, though it remains relatively low when compared to historic averages. “It takes time for investors, especially retail investors, to understand that those steps (the economic measures) will have significant impact on the economy, and therefore, will have an impact on listed companies,” Menacorp’s Qaqish said.

Asked about outlook, he said he was bullish as much of the negative news was already priced into share prices. Qaqish added that he expected to see “reasonable growth” in terms of corporate earnings for 2018.

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