DFM rises 3.17% as Arabtec gains 10.34%
02/07/2014 06:17 AST
Both the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) indexes bounced back on Tuesday after days of decline that saw the DFM index plunge 6.73 per cent in the last two days alone.
On Tuesday, the DFM index gained 3.17 per cent to reach 4,067.67, while the ADX general index rose 0.62 per cent to end at 4,579.40.
Despite the incline in the DFM index, some of Dubai’s powerhouses ended the day’s trade in the red. These include Union Properties, and Drake & Scull International, which fell 3.73 per cent, and 4.44 per cent respectively.
Other stocks rose, as Arabtec gained 10.34 per cent, Dubai Investment Co went up 11.11 per cent, and Emaar inclined 5.83 per cent.
Real estate developer, Arabtec, started the day’s trade at a share price of Dh2.51, and immediately plunged to Dh2.35. Prices remained stable until noon when trade became stronger, and prices rose to their closing value of Dh2.88.
The company’s share prices had dropped 16.45 per cent in the last two days, and a total of nearly 30 per cent in the past week alone.
Analyst Osama Al Ashry commented on Arabtec’s performance saying that the stock is currently oversold, and at such low prices, buyers consider it a worthy investment.
As for the markets as a whole, he attributed the rise in indexes to a correction following a period of decline.
“The DFM index had dropped below 4,000, and it is now trying to bounce back above that level, but I consider this a mere correction; there isn’t any real purchasing activity in the market,” the analyst said.
Al Ashry, a member of UK organisation, Society of Technical Analysts, said he expected the indexes to continue rising over the next couple of days, but warned that markets will be risky for trade over the next week or two.
“During July, I expected the DFM index to end between 3,500 and 4,300. In order for the index to grow, it will need to break a resistance of 4,590, but this is a remote possibility, and I do not expect it to happen,” he said
On Tuesday, the DFM index opened at 3,942.82, and plunged to a low of 3,731.59 shortly after 11am. The index continued to fluctuate throughout the rest of the day, but was on an overall incline, ending at 4,067.67.
Discussing ADX, Al Ashry said, “If the index fails to break 4,790, we might see it drop to 4,280.”
Of the 31 stocks traded on DFM, 15 went up, 15 went down, and one remained unchanged. Of the 31 stocks traded on ADX, 17 declined, nine advanced, and five remained flat.
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