Profit booking drags DFM down, bullishness remains


26/03/2009 00:00 AST

Profit booking put strong pressure on Dubai Financial Market (DFM) yesterday as the general index lost 31.28 points, or 1.93 per cent, to close at 1,591.

But analysts said the market would maintain its overall upward trend in the short term, adding that the current correction was expected after all the leading stocks rallied sharply on Tuesday.

All active stocks retreated yesterday, with Emaar topping the list of active losers. However, the property giant showed signs that it was regaining its leading role in the market as it was the most active stock by both volume and value. Emaar lost 4.54 per cent to close at Dh2.31 after gaining 10.5 per cent in the previous session.

DFM stock also faced selling pressure and fell by three per cent to Dh1.28. Arabtec declined by 2.84 per cent to close at Dh1.71 and DIB dropped by 3.22 per cent to Dh2.70.

Turnover declined sharply as 331 million shares with a total value of Dh493.3 million changed hands – a third of the turnover seen during Tuesdays bounce.

Analysts said the sharp decline in turnover during a downturn in the market was a very positive indicator of continuing bullishness as investors expected a rebound that would push prices higher and were refusing to sell their holdings at the current prices.

"There was an aggressive rally in some stocks on the DFM on Tuesday and yesterdays correction was a natural movement," said Mohamad Al Beheiri, Trading Manager at Amanah Financial Services. "However, the market could maintain most of its recent gains as leading stocks, especially Emaar, could remain above their strong support levels. Also, turnover declined sharply, reflecting positive sentiment among investors because they are willing to hold their portfolios for a longer period as they wait for the next bounce in the market."

Al Beheiri said DFM was attracting increasing amounts of new investment and foreign investors had been net buyers from the beginning of the week. "There is some new liquidity and foreign investors are injecting more money into the market. On Tuesday, foreign investors bought shares worth Dh202m and sold shares worth Dh117m. Yesterday they bought shares worth Dh59m and sold shares worth Dh 27m, so they were net buyers even during the correction," he said.

Al Beheiri highlighted the return of Emaar as a leading stock and said this would produce strong stability in the short term. "Emaar has been consolidating for a long time and its impact on the market has been limited during the past few months. The stock traded at between Dh1.80 and Dh2.20 over the past four months. The length of this period was a good sign as Emaar consolidated at that level and we do not expect any downturn trend in the stock in the near future. The stock has broken through firm resistance at Dh2.25 and we expect a strong rally to Dh2.75 in the short term before it meets stronger resistance at Dh3.20. There is increasing interest in the stock. Foreign investors increased their stake in Emaar from about 4.7 per cent at the beginning of the week to 5.3 per cent yesterday."

Al Beheiri predicted that Emaar would lead the DFM in an upward correction during the next few weeks as the stock regained its correct value in the market.

"DIB is projected to be another important player in the near future," he said. "The stock is facing very aggressive resistance at Dh2.70, the current close. However, the stock could turn very bullish if it breaks through this level and witnesses a very strong rally to Dh4. If it falls it could find support at Dh2.44."

For more on this: http://www.business24-7.ae/Articles/2009/3/Pages/25032009/03262009_459eabf521b84158bc4f6646bda83f89.aspx

www.business24-7.ae
Market News
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | News Archive
Most Viewed Companies
Ticker Price Volume
QNBK 150.9 228,678
SABIC 85.11 7,735,389
RIBL 10.92 324,365
STC 62.02 505,020
RJHI 57.12 1,663,650
EEC 25.91 1,450,754
SUDATEL 0.55
Recent News

Major firms in Oman post robust profit growth in first half
Major companies in Oman, which constitute the MSM 30 Index, have posted a robust growth in net earnings and revenues for the first half of the year, over the same period of last year.

The

Bank Muscat highlights unique role in e-payment
Bank Muscat, the flagship financial services provider in the Sultanate, as part of its ‘Let’s Do More’ vision and commitment to partnership and innovation, extended support to the 4th international

Ooredoo Group net profit jumps 46% to QR1.5bn in H1
Driven by its successful digital strategy across various key markets and “positive” forex movements, Ooredoo Group has posted a half yearly (H1) net profit of nearly QR1.5bn, up 46% on the same perio

Gulf markets slip as Saudi hit by poor Q2 earnings
Gulf stock markets mostly fell yesterday as soft oil prices dampened buying, while Saudi Arabia’s index fell 0.7% on disappointing quarterly corporate results.

Etihad Etisalat (Mobily) slump

Russia selling cars it doesn’t make shows havoc rouble sowed
The oil crash gave enough of a jolt to the rouble to send a steady stream of luxury cars from Russia to Germany, China and the US, with sales of just Land Rovers quintupling. At last, a textbook case

GulfBase GCC Index
Search By
  • Company Symbol
  • Company Name
  • Mutual Fund Name
  • News Content
Send this page to a friend

Poll

Looking ahead, what change you are more likely to make in investing in your domestic stock market?