17/09/2015 05:46 AST
Global stock markets ended in the green on Wednesday just a day ahead of the much-anticipated announcement from the US Federal Reserve that could see interest rates hiked for the first time in nearly 10 years.
In the UAE, the Dubai Financial Market (DFM) index went up 1.79 per cent to reach 3,597.11 as liquidity remained weak, with only Dh357 million traded in the market. Meanwhile, the Abu Dhabi Securities Exchange (ADX) general index rose 0.67 per cent to end at 4,534.7.
Analysts remained split about the outcome of the Federal Reserve’s meeting. Osama Al Ashry, a member of UK organisation, Society of Technical Analysts, said that any increase in rates will hurt countries, such as the UAE, whose currency is pegged to the US dollar, and reduce global demand for oil, pushing prices even lower.
Discussing the UAE’s equity market, Al Ashry said that the rises in indexes on Wednesday were merely corrections, and that the markets were trading in high-risk areas.
“If the DFM index reaches its resistance level at 3,836, it would be trading at medium risk. The index has a support level at 3,389, which, if reached, can bring it to a new low. In February, the index reached 3,230 and it hasn’t been able to bounce back ever since, so the market is definitely at risk,” the analyst said.
He added that the index could fall to 2,700 in the next quarter if it fails to bounce back soon.
“Despite valuations being attractive now, we continue to see weak liquidity, which means that investors are still wary of the market, and why wouldn’t they be? Talks of introducing VAT, and the removal of fuel subsidies mean that the UAE’s economy is slowing down,” Al Ashry said.
In Dubai, Damac share prices went up 1.99 per cent as the company accounted for 34 per cent of the total trade in DFM. Emaar also ended 2.1 per cent higher, Emaar Malls went up 5.15 per cent, Amlak rose 1.5 per cent, Arabtec gained 1.11 per cent, and Gulf Finance House grew 2.31 per cent.
In Abu Dhabi, Arkan Building Materials Co. topped the gainers’ list with a 13.6 per cent increase, followed by Dana Gas with six per cent, International Fish Farming Holding (Asmak) with 5.8 per cent, RAK Properties with 3.7 per cent, and Sudatel Telecom Group with 3.45 per cent.
Etisalat remained the most actively traded stock in ADX after foreign investors were allowed to trade its shares for the first time on Tuesday. Share prices ended flat, however, as the company accounted for 40 per cent of the market’s trade value.
Of the 34 stocks traded on DFM, 31 went up, and three went down. Of the 25 stocks traded on ADX, 14 advanced, seven declined, and four remained unchanged.
Gulfnews
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