Late Dubai Stock Update

24.04.08

A late rally helped the Dubai bourse to escape the doldrums and close in the green on Thursday, but the capital’s market fell for the second time this week despite higher volumes.

The Dubai Financial Market General Index was down 15 points at the mid-session mark, but heavy buying in the afternoon saw it close on 5,742 points, up 0.61 per cent or 35 points.

The Abu Dhabi Securities Market found it tougher going and has struggled since breaching the 5,000-point barrier to post a two-year high on Wednesday. On Thursday, it fell 0.18 per cent to 5,006 points.

“It has been a good week. Dubai saw a correction on Wednesday and this continued in early trading on Thursday, but the market wasn’t looking bad except for the low volumes,” said Sherif Abdul Khalek, dealing room manager at Al Futtaim HC Securities. “Most traders were expecting the market to recover – there was steady accumulation by funds and little selling pressure.”

This accumulation, most notably in the DFM stock, Aramex and Tamweel, gave confidence to other stocks, prompting increased flow on the buy side in the final hour’s trading. Both foreign and local funds were active.

The DFM stock was behind Dubai’s resurgence, claiming top spot on the volume and value charts with 57 million shares worth a combined Dh335 million changing hands.

This compares to the respective total market figures of 235 million and Dh1.25 billion. The DFM climbed 2.06 per cent to Dh5.93.

Aramex also prospered on the back of high volumes, climbing 3.54 per cent to Dh2.63. It has fallen nine per cent since the end of February amid the end of a lock-in period for founder investors. Tamweel continues to grab investors’ attention.

Many analysts have been especially bullish on the UAE mortgage sector and it seems this is translating into higher stock prices. Tamweel fell 1.82 per cent on Thursday, but is still up 19 per cent this month, while Amlak Finance – Emaar’s mortgage subsidiary – has jumped 21 per cent over the same period, although it has so far failed to recapture the Dh5-mark.

Meanwhile, Aldar Properties accounted for almost two-thirds of the ADSM’s Dh1.5bn turnover and this demand propelled it up 3.06 per cent to Dh11.80, its highest close since February 21.

Khalek said: “Abu Dhabi seems to be heavy around the 5,000-mark and it needs to close 50 to 80 points above this to launch a new uptrend. Most brokers are expecting an increase in activity over the next two months.”