05/12/2014 07:51 AST
The Dubai index is likely to consolidate at current levels next week on stability in crude oil prices, after the index shed 7 per cent last week, with some recovery in Emaar Properties.
On Thursday, the Dubai Financial Market General Index ended 0.36 per cent lower at 4,171.15, after hitting a high of 4,261.87.
“We will continue to consolidate as we see stability in oil prices. Even though we have had a little bit of shake out, the underlying fundamentals are still solid,” said Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s asset management group.
“I would expect Emaar to recover after the selling pressure. Banking sector appears attractive based on valuations,” said Khokhar. On Thursday, Emaar Properties, the real-estate developer that accounts for about 20 per cent of Dubai’s gauge, ended 7.44 per cent lower at Dh8.83 per share.
On Thursday, in other regional indices, Saudi’s Tadwul All Share index closed 1.77 per cent higher at 8,957.63. The Qatar Exchange Index ended 1.08 per cent higher at 12,748.18. The Kuwait Stock Exchange Index ended flat, while Muscat’s MSM 30 ended 0.11 per cent lower.
The Dubai index is expected to go up in the short-term before coming down.
“I expect the market to go up in the short term without exceeding resistance area of 4,500,” said Osama Al Ashri, member of British organisation, Society of Technical Analysts, adding support is placed at 4,055.
“This will be an acceptable correction over a long term perspective,” said Ashri.
Dubai Investment Company may hit a new target of Dh2.39 per share. DFM may hit a target of Dh2.9 per share, Al Ashri said.
Al Ashri is bearish on Emirates NBD, Dubai Islamic Bank, and National Bank of Abu Dhabi for the next few weeks.
Emirates NBD may hit the support area of Dh8. Dubai Islamic Bank may hit a target of Dh6.2. National Bank of Abu Dhabi may hit support of Dh12.20. Abu Dhabi Commercial Bank may hit a target of Dh5.80 per share.
The rising business confidence in the corporate sector, recovery in the real estate business and increased government spending are expected to drive asset growth and profitability of UAE banks according to SICO, a Bahrain-based investment bank.
In the UAE, credit growth in the banking sector was about 4 per cent for the first six months of this year. Analysts expect the overall credit for the year to be about 7 per cent with a stronger outlook for next year. Credit rating agency Standard and Poor’s expect around 8—9 per cent credit growth for the sector in 2014-2015, in line with healthy economic activity driven by strong government spending, and non-oil private sector growth.
Gulf News
Please wait...
