Financials lead bounce on ADX; turnover low

14/06/2010 00:00 AST

Banking and real estate stocks supported a moderate bounce in the Abu Dhabi Securities Exchange (ADX) yesterday after buying interest returned once stocks had reached very attractive levels for investment.

The ADX index gained 14.05 points, or 0.54 per cent, to close at 2533.97 points yesterday, due to mainly upside movements in heavyweight banks. FGB advanced 2.9 per cent to Dh14.30, NBAD gained 2.1 per cent to Dh10.20, and Adib surged 2.35 per cent to Dh2.68. UNB also added 1.7 per cent to close at Dh2.98 while ADCB closed flat at Dh1.53.

"Banks led the recovery on the ADX yesterday and banking stocks advanced on buying interest from local investors. This is a good sign that locals are interested in financial stocks, as these banks are expected to report positive results during the second quarter. Prices also reached oversold areas and were very attractive for investment," said Wadha Al Taha, a senior market analyst.

Real estate stocks also bounced up during the session. Aldar advanced 2.3 per cent to Dh3.14 and Sorouh climbed one per cent to Dh2.04 while Rakprop surged 2.6 per cent to Dh0.40.

Energy stocks were also bullish yesterday with Dana moving 1.5 per cent up to Dh0.67, Aabar advancing 1.25 per cent to Dh1.62 and Taqa ending flat at Dh1.07.

Heavyweight etisalat closed flat at Dh10.35 despite being the top active player by value. There were relatively good transactions in the stock after the company announced plans to spend $1.4 billion (Dh5.13bn) on expanding its Egypt unit.

Turnover remained low in the ADX yesterday, with 59.3 million shares worth Dh93.1 million changing hands. Etisalat dominated about 23 per cent of the total value, while Dana and Aldar attracted about 40 per cent.

Ehab Rashad, Trading Manager of Direct Broker for Financial Services, predicted that strong buying interest would start in the ADX if the index hit its important support level at 2570 points. "The bounce was weak in the market and buying interest remained at low levels. Investors are still on the sidelines waiting for strong signals of a recovery. There need to be a break above the 2570-points level this week to attract investors again," he said.

"There is a consensus that there is no immediate threat to local markets, so investors are using global markets as a benchmark for local indices. They are waiting for relief in the global economy to inject more liquidity in local stocks," said Al Taha.

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