Dubai:
Dubai index reclaimed the keenly watched 3,000 mark on Monday, breaching a technical bullish indicator also known as the 50-day moving average as traders resorted to aggressive buying in property stocks.
The buying momentum has been gaining strength since the MSCI rebalancing last week, and on Monday traders were seen buying Emaar Properties, Damac Properties, Emaar Malls, Emaar Development, Arabtec in anticipation that stock prices may rally from here.
“We have seen a GCC-wide pick-up in flows and momentum. We are seeing interest in Dubai and it’s a matter of follow through buying from local and international investors. UAE stocks are decently priced as valuations are at the lower-end,” Saleem Khokhar, head of equities at First Abu Dhabi Bank (FAB) asset management group said.
The Dubai Financial Market General index closed 1.59 per cent higher to 3,034.64, after hitting a high of 3,034.66. The 50-day moving average was placed at 3,017.
“We may see further buying towards the higher target zone at 3,065/3,130 in the short term,” FABS said in a technical note.
Emaar Properties closed 2.64 per cent higher to Dh5.45. Dubai Islamic Bank closed 0.58 per cent higher to Dh5.24. Gulf Finance House closed 1.38 per cent higher to Dh1.47.
Drake and Scull closed 0.86 per cent higher to Dh1.17. DFM closed 0.93 per cent higher to Dh1.08.
The Abu Dhabi Securities Exchange general index closed at 4,577.15, up 0.24 per cent. Saudi Arabia’s Tadawul index closed 0.21 per cent higher to 8,346.77.
Outlook:
The outlook is positive going ahead for regional markets. “We are heading towards the inclusion (of Saudi in the MSCI EM index). We have seen positive interest and flows coming into the region. In terms of valuations we are cheap relative to EM, and we have specific catalysts in our favour and oil prices remain strong,” Khokhar said.
Dubai index has shed more than 9 per cent so far in the year compared to 14 per cent rise in the MSCI emerging market index.
“We are in the middle of Ramadan and the summer season and we expect to see higher volatility in general in coming sessions,” Khokhar said.
