UAE, regional stock markets to remain volatile

03/09/2015 05:57 AST

Local and regional stock markets are expected to remain volatile in the short-term due to global uncertainty accompanied by huge gyrations in oil prices.

On Wednesday, the Abu Dhabi Securities Exchange General Index closed 0.53 per cent lower at 4,352.21, while the Dubai Financial Market General Index closed 1.97 per cent down at 3,513.95.

“We have seen a lot of volatility in oil and equity markets in the past few weeks,” Sebastien Henin, head of asset management at The National Investor, said. “[The] market [will] continue to remain volatile and we are not expecting markets to be in one way or the other,”

Oil prices have fallen nearly half from last year’s high on supply glut even as the Organisation of Petroleum Exporting Countries (Opec) refuses to cut production despite expectations of a slowdown in demand from key consumer like China.

In stock-specific movements in Abu Dhabi, Aldar Properties closed 0.90 per cent higher at Dh2.24, while Dana Gas closed 1.89 per cent lower at Dh0.52.

Out of a total of 26 stocks traded on the exchange, the shares of 13 firms fell while those of eight companies rose.

In Dubai, Amlak Finance closed 1.01 per cent lower at Dh1.97, while Dubai Islamic Bank (DIB) closed 3.64 per cent lower at Dh6.61. Gulf Finance House closed 2 per cent lower at Dh0.539.

Emaar Properties closed 5.06 per cent lower at Dh6.19 in trade.

“Having in mind the given bearish characteristics, long-term traders should remain neutral at current times in Emaar Properties with the aim to reposition near a strong support zone and only after clear bullish reversal signs,” Menacorp said in a report to its clients.

Arabtec closed 2.66 per cent lower at Dh1.83.

“The share remains in a strong downtrend in the long-term trading in price ranges the share found itself trading at in 2013 just before the bullish run of 2014,” Menacorp added on Arabtec.

Out of a total of 36 stocks traded on the exchange, the shares of 22 firms fell, while those of nine other companies fell.

Oil markets “A lot of news... is expected to hit the market related to increase of production from Iran, Opec meeting etc,” Henin said. “I suspect volatility would continue in the oil markets.”

Fortunes in the local and regional stock market are closely tied with oil, which is the major source of revenues for governments.

Elsewhere in the Middle East, the Qatar Exchange index closed 0.26 per cent lower at 11,385.90, while Saudi Arabia’s Tadawul index closed 0.95 per cent lower at 7,367.55.

Muscat Securities MSM 30 index closed 0.93 per cent lower at 5,750.88.

Gulfnews