Telecom sector pushes ADX down, etisalat retreats 6.7%

The telecom sector put strong pressure on the Abu Dhabi Securities Exchange yesterday, pushing the index 46.64 points, or 1.87 per cent, down to a close of 2,441.28 points.

Etisalat retreated 6.7 per cent to close at Dh10.50 after the distribution of its dividends. Profit booking in the stock was very high at the end of a quarter in which it was among the best performers on the ADX.

"Etisalat has rallied since the beginning of the year," said Fadi Al Said, Head of Equities at ING Investment Management Middle East.

"Following the distribution of dividends some investors started to book profits, and this put pressure on the index."

Active stocks included Aldar and Sorouh, which closed up 3.38 and 1.8 per cent, respectively. Waha gained six per cent to close at Dh0.88.

Turnover remained low with trade volume of 110.8 million shares and trade value of Dh176.2 million.

However, support for the ADX remained firm and analysts expect the market to recover in the next two sessions.

"The index has good support at 2,407 levels and this will help the market to recover soon," said Taimur Sadaat, a senior analyst at Arab Capital Markets. "The index is expected to rally as the next resistance is high at 2,554 points."

He said Rakprop might rally during the next two sessions to hit Dh0.53 and Waha might advance to Dh1 in the coming week. And he expected Taqa to continue its strong performance in the short term.

"The company is buying back its shares, an indicator that the price is cheap, and this has encouraged investors to buy the stock. There has been increasing trade volume in Taqa since it started the buyback programme."

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