UAE indices little changed as trade values remain low

09/05/2017 05:31 AST

The UAE’s main equity indices ended the day little changed on Monday as traded values remained low, with the Dubai index trading in narrow ranges and share prices of blue chips only moving sideways.

The Dubai Financial Market (DFM) index rose 0.23 per cent to reach 3,391.67, while the Abu Dhabi Securities Exchange (ADX) general index inched up 0.17 per cent to reach 4,578.22. “I think the market’s performance is really disappointing, despite both the indices ending higher today. Trade values are very weak, and we see that whenever GFH shares aren’t strongly traded, values drops, which tells you that one or two stocks control the values in the market,” said technical analyst Osama Al Ashry.

GFH Financial Group’s share prices went up 2.68 per cent to reach Dh2.3, but just Dh28 million worth of share changed hands during the day, accounting for nearly 10 per cent of the total traded value on DFM.

The sideways trading on Monday comes just hours after French citizens voted to elect centrist Emmanuel Macron as their next president, boosting investor confidence in riskier asset classes.

Neither the euro nor equity markets in Europe saw strong gains, however, as Macron’s victory had already been priced in.

“It’s hard to explain the lack of appetite in markets. Usually, the period post dividend season is a good time to buy stocks, but this year around, we’re not really seeing much buying. You have to also remember that Arabtec’s recapitalisation plan is a huge disappointment for investors, and this is a stock that used to account for a lot of buying activity,” Al Ashry said. He said the next support level for the DFM index would be at 3,280.

Arabtec’s recapitalisation plan includes a Dh1.5 rights issue, which will be launched on May 15, followed by a capital reduction exercise. The company’s share prices have been falling, though, amid a lack of interest from investors to subscribe in the issue. Arabtec’s shares were up 0.66 per cent on Monday to reach Dh0.76.

Meanwhile, Drake and Scull International topped the market in terms of traded values, accounting for 19 per cent of the total traded value on DFM. Its share prices inched up 0.75 per cent to end at Dh0.402, having plunged nearly 10 per cent a day earlier after shareholders unanimously expressed no interest in subscribing to the company’s rights issue.

Gulfnews