Bourses take a U-turn; Banking Shares Remain Under Selling Pressure

DUBAI - UAE bourses took a U-turn on Wednesday as Dubai and Abu Dhabi recorded slight recovery in property sector amid hopes of better fourth-quarter earnings. Banking shares remained under selling pressure and expected to trade in negative columns in the wake of poor earnings due to high provisioning in last quarter.

By Muzaffar Rizvi

Published: Thu 28 Jan 2010, 11:18 PM

Last updated: Mon 6 Apr 2015, 10:27 AM

Dubai Financial Market’s Genera Index, or DFMGI, finished higher as stocks rallied from the Tuesday’s seven-week closing low, but further volatility is expected amid fear of weak corporate results by major companies in property and banking sectors. The index climbed 0.6 per cent to 1,565.48 points, trimming its losses to 13.2 per cent this year.

Emaar Properties, the UAE’s biggest property developer, rose 1.72 per cent to Dh2.95 and Dubai-based contractor Arabtec surged 3.35 per cent to Dh2.16. However, Union Properties tumbled 5.56 per cent and finished the day at Dh0.51 as Credit Suisse slashed its price target on the stock to Dh0.03 from Dh0.80.

Emirates NBD and Gulf Finance House also closed in negative columns shedding 3.92 per cent and 4.42 per cent, respectively.

“Market managed to hold onto a gain today but we need to string two or three days together to break out of the zig-zag pattern of the last few weeks,” Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, told Khaleej Times.

The benchmark index of Abu Dhabi Securities Exchange also edged up 0.12 per cent to 2,602.01 points. Abu Dhabi Commercial Bank rebounded from an initial drop to end flat, a day after reporting a fourth-quarter loss on record provisions, helping Abu Dhabi’s main index eased away from Tuesday’s seven-week closing low. First Gulf Bank also closed flat at Dh15.70 despite having solid numbers in the fourth quarter. Aabar Investments closed at Dh2.13.

“Earnings should start to hit the tape in the next few days, First Gulf Bank reported solid numbers today beating estimates. The ADCB stock performance today following its results on Tuesday show that significant weakness is already priced into these stocks and as such there is significant upside potential should large caps exceed estimates in the coming weeks,” Wakeman said.

“Sorouh are expected to report earnings today or tomorrow and that will be key for direction of the heavily battered real estate stocks tomorrow,” he said. “Earnings season will provide both positive and negative leads, which will keep the market volatile in the short term, probably more with a negative bias,” said Jithesh Gopi, head of research at SICO investment bank.

More news from Business
Luxury vrooms again


Luxury vrooms again

This year the #NoFilterDXB witnessed a dazzling array of replica vehicles from some of Hollywood’s most classic movies and TV shows.

Business4 days ago