UAE Equities Likely to See-Saw in Thin Trade

31/01/2010 00:00 AST

UAE stocks will trade in narrow ranges next week as investors are likely to remain cautious ahead of fourth-quarter corporate results to be announced by blue chips companies, notably Emaar Properties.

Property and banking sectors will be in focus during the week and their shares may extend their losing streak, as most investors are sceptical about positive announcements in the wake of the global economic downturn.

Analysts said the downtrend will continue until volumes improve. None of the analysts are expecting any major rally through the earning season, as investors, they said, are still not willing to jump into the ring to cash in on the low price opportunities in key shares. The Dubai Financial Market General Index is likely to trade in between 15,000 points to 16,000 points, while Abu Dhabi Securities Exchange index may test the 2,600 level again and may get support at 2,550 points.

Dubai Financial Market and Abu Dhabi Securities Exchange showed mixed trends last week with bearish sentiment prevailing most of the time. Dubai Financial Market’s General Index declined 52.83 points, or 3.19 per cent, last week to 1,599.43 points. It broke the psychological barrier of 1,600 points twice and finally settled just below that barrier amid a lack of positive news from corporate results. The benchmark index may get support at 1,550 points this week amid hope of some positive fourth-quarter results notably from property giant Emaar Properties.

“Barring severe global market weakness I think we should continue to gain back lost ground this week and hopefully we will see figures from Emaar that will restore some confidence to Dubai investors,” Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, told ?Khaleej Times.

“Earnings season will provide both positive and negative leads, which will keep the market volatile in the short term, probably more with a negative bias,” said another analyst who asked not to be named.

Emaar Hit

In the property sector, Emaar shares remained under selling pressure throughout the week. The company’s shares lost 6.08 per cent, extending past two-week losses to over 12 per cent. Its shares began the week at Dh3.29 and fell below Dh3 level by hitting Dh2.83 on Sunday. Later, it recovered and closed the week at Dh3.09. The shares may test Dh3 level again this week and likely to get support at Dh2.75, as investors are sceptical over positive earnings announcement in the wake of tough economic conditions worldwide.

Arabtec Holding’s shares contracted 3.81 per cent to Dh2.27 amid lack of investor interest since the company had announced a deal with Abu Dhabi-based Aabar Investments. The shares are expected to continue their downslide till the company’s shareholders meeting clear the proposed acquisition deal by mid February.

Deyaar also traded in negative columns and fell 5.56 per cent to DhDh0.51.

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Khaleej Times