Real estate stocks and etisalat push ADX up

04/05/2010 00:00 AST

The Abu Dhabi Securities Exchange (ADX) ended a five-day losing streak and bounced up yesterday thanks to good buying interest in real estate stocks and a continued uptrend in heavyweight etisalat.

The ADX index added 21.52 points, or 0.78 per cent, to close at 2795.38 points with the return of buying interest by investors in real estate stocks, especially Aldar and Sorouh.

Aldar recovered and added 3.44 per cent to close at Dh3.93 after suffering from strong selling pressures in the past few sessions once the company had posted disappointing first quarter results. Sorouh also advanced 1.3 per cent to close at Dh2.31, while Rakprop remained flat on Dh0.49.

"First-quarter results of real estate stocks were disappointing to investors in the ADX despite there being an understanding that the sector is still facing hard times. Real estate stocks Aldar and Sorouh faced strong downward pressures and were oversold," said Ehab Rashad, Trading Manager of Direct Broker for Financial Services.

"Buying interest has returned to real estate stocks from low levels; we have noticed good buying from foreign investors in Aldar during the past two sessions. This trend helped to improve the sentiment in the market and other stocks advanced on the back of the rally in realty stocks," he added.

Heavyweight etisalat continued to lift the ADX index, advancing by a marginal 0.47 per cent to Dh10.70.

However, banking stocks returned mixed results yesterday, with heavyweight NBAD ending the session flat at Dh11.90 while FGB advanced 1.1 per cent to Dh18.40. ADCB was the top player among banking stocks, rallying eight per cent to close at Dh1.88.

Adib went down 1.4 per cent to Dh2.77, mainly due to changes in the stock price after the ADX updated Adib's share book by registering 20 per cent bonus shares in the shareholders' registry account.

Aabar Investments continued to advance and added 0.9 per cent to end at Dh2.24 amid increasing rumours in the market about a possible joint venture with Dubai-based Arabtec.

In general, the market remained calm despite an increase in the turnover yesterday compared to the previous session, with 45.1 million shares worth Dh96.2m changing hands. Real estate stocks dominated around 40 per cent of turnover.

"The ADX remained in a calm trend in the range of 250 points between 2700 and 2950. The index has been moving up and down in this range for a long time and we do not expect major changes in the near future," Rashad said.

"Turnover is still weak and there is a deep lack of movers. Also, companies that have announced their first-quarter results so far have not given any strong impetus to the market," he added.

ADCB rallies

Abu Dhabi Commercial Bank (ADCB) bounced up sharply yesterday, gaining eight per cent to close at Dh1.88 amid strong buying interest in the stock.

ADCB witnessed strong downturn movements last month and lost 21.7 per cent to end at Dh1.70 in April. The stock witnessed strong selling pressure last week after the bank posted Q1 net profits of Dh225m, a 36 per cent drop as provisions for bad loans continued to weigh on earnings. ADCB said it made net impairment allowances worth Dh681 million in the quarter, Dh589m of which were related to provisions for loans and advances.

However, the past two sessions have seen a good recovery in the stock after it was heavily oversold. The ADCB stock has gained 11.1 per cent this week.

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