Emaar and Emirates NBD pull DFM lower
The unabated downfall on the Dubai Financial Market (DFM) continued for the third consecutive session yesterday amid speculative selling pressure on weak global cues.
Market heavyweights Emaar, Emirates NBD, DFM, Arabtec, Air Arabia, DIB, and others pulled the index further lower.
Reflecting the weak trading pattern, the DFM general index fell 1.89 per cent to end the session at 1714.09 points, showing a net drop of 32.97 points against its previous closing of 1747.06 points.
All sub sectors closed in the red and the realty, telecom and utilities indices closed with losses of more than two per cent. The finance/investment sector was the worst hit and its sub index fell 3.12 per cent, while the banking index eased 1.08 per cent. The less impacted sectors were insurance and transport, which witnessed less than a per cent of losses.
"The DFM was down today just because of a ripple effect from the global markets. Asian markets were also negative today. Positive news, such as from Nakheel, and encouraging results from some banks couldn't boost the market since they were all anticipated. I believe if positive news comes from Dubai World, only then will the market sentiment improve," Hassan Awan, an analyst at The National Investor, told Emirates Business.
Only Gulf Navigation, Aramex and Arab Insurance Group bucked the trend in yesterday's trading which saw 23 among the 29 traded stocks falling, while three closed flat.
The market yesterday opened 1.43 per cent lower at 1722 points over selling pressure in 20 stocks. Al Salam Bank Bahrain and Aramex were trading higher. Logistics major, Aramex, had been trading higher throughout the session, while Al Salam Bank Bahrain and Gulf Finance House were moving sideways marginally up and down owing to speculative trading.
The DFM is likely to rebound, as a technical correction is due at any moment, forecast technical analysts.
"The market is still trading sideways and moving downwards, but is well above the short term supports of 14-SMA on weekly charts, which indicates some recovery in the coming sessions. A break above 1770 points is required for it to advance further to test the 200-day EMA of 1900. Lower supports are at 1690," said Shiv Prakash, Equity Investment Analyst (Technical) at MAC Capital Advisors. Hovering in a range of 23 points, the index showed reached the session's highest of 1723 points in the first half and the lowest of 1692.87 just before closing.
"If the index closes below the pivot of 1717 points, it could continue to slide until the 1688 support level. Otherwise, it may move up towards the 1742 resistance levels," said Shiv Prakash.
Turnover increases marginally
Trading value on the DFM continued to be under pressure yesterday as it failed to breach the Dh500-million average.
However, there was some improvement, as it went up 48.63 per cent to Dh370.54m from Dh249.30m on Tuesday. The Dubai exchange witnessed volumes of 189.86 million shares in over 4527 deals.
"Though there was some improvement from Tuesday, the trading value is still very low. Liquidity is still under pressure," said Hassan Awan.
Emaar, Arabtec, DFM, DIB and Air Arabia stocks contributed 86.23 per cent of the total turnover, while 51.34 per cent came from Emaar alone.
Banking and realty reel under pressure
First quarter results failed to have a sustained positive impact on the bourse yesterday as banking and realty stocks were the main culprits for pulling the index lower.
No gainer was recorded among stocks in these two sectors on the bourse yesterday. Tracking the adverse conditions in global markets, and with no clarity on the near-term direction of the market, Ajman Bank, Al Salam Bank-Bahrain, Dubai Islamic Bank, Emirates NBD and Gulf Finance House all fell.
Arabtec, Deyaar, Drake and Scull International, Emaar and Union Properties followed suit. With a drop of 5.69 per cent, Union Properties fell the most to close at Dh0.431, while Deyaar eased 4.65 per cent and ended at Dh0.410. Market heavyweight Emaar lost 2.32 per cent and closed at Dh3.790. Arabtec and Drake and Scull fell more than three per cent to close at Dh2.33 and Dh0.859 respectively.
Among banking stocks, Ajman Bank fell 1.39 per cent to close at Dh0.779, while Dubai Islamic Bank and Gulf Finance Houses eased less than 0.50 per cent and ended at Dh2.23 and Dh0.769 respectively. Al Salam Bank Bahrain – after trading higher for some time – and Emirates NBD fell more than two per cent.