Dubai Financial Market Dubai Financial Market

2,919.46 19.30 0.67 %

Broad based buying seen in UAE shares, Saudi index tumbles

(10/12/2017 7:00:00 AM)

As Drake and Scull shares cooled off, traders took a lead from stronger than expected third quarter results from Dubai Islamic Bank to buy into banks, which were trading at support levels, and other shares. Saudi shares tumbled, however.

The Dubai Financial Market General index closed 0.80 per cent higher at 3,637.55, closing at its 50-day moving average, a trend indicator that would suggest bullishness if the index remains above this level and vice versa.

Dubai Islamic Bank closed 0.65 per cent higher at Dh6.21. Gulf Finance House closed at Dh1.63, up 0.62 per cent. Dubai Investments closed more than 2.5 per cent at Dh2.40. “Today’s price action hints at further recovery towards the previous high at Dh2.54/2.62 in the short term,” Shiv Prakash, senior analyst with National Bank of Abu Dhabi Securities said.

Aan Digital closed 7 per cent higher at Dh0.52. Insurance shares also surged along with Amlak. Drake and Scull closed 2.58 per cent lower at Dh1.89.

The Abu Dhabi General index closed 0.96 per cent higher at 4,514.99. Dana Gas closed 2.53 per cent higher at Dh0.81. “Traders who bought Dana Gas at the recommended levels may look to book partially or trail the stop loss higher to the break even,” Prakash said. NBADS had a technical buy call at Dh0.75. Abu Dhabi Commercial Bank closed 1.24 per cent higher at Dh7.32. First Abu Dhabi Bank closed 1.45 per cent higher at Dh10.50. Abu Dhabi Islamic Bank closed 1.24 per cent higher at Dh7.32. Aldar Properties, which closed 1.27 per cent higher at Dh2.40, may target Dh2.52 in the short term, Prakash said.

Tadawul tumbles

Saudi shares continued with their losing streak on selling in insurance companies after the regulator stopped nine insurance companies to conduct business, citing regulatory concerns. Saudi Arabia’s Tadawul index closed more than 2 per cent lower at 6,889.98. The index is down for the fifth consecutive day, down almost 5 per cent for the week.

“The reasons may be: a somewhat delayed reaction to the failed FTSE upgrade, as retail investors realise through their brokers that the market is not yet there in terms of systems and processes for being an Emerging Market,” said Vrajesh Bhandari, Portfolio Manager, Asset Management at Al Mal Capital.

Last month, the FTSE added Kuwaiti stocks to its emerging market index, and said “Investors are choosing to sidestep third quarter reporting season, a quarter that is expected to be a difficult one for most Saudi corporates,” said Bhandari.