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Dubai bourse strengthens its modest recovery |
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1/27/2009 10:24:13 AM |
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Dubai extended its winning run to three sessions, despite turnover falling to its lowest level for more than three years.
The latest trading slump indicates that selling pressure is continuing to slow, while buyers refuse to commit funds to the market as analysts, brokers and even top exchange officials warn that a price recovery is unlikely until the second half of 2009.
Therefore, scared investors have little incentive to buy into a beleaguered and uncertain market. Nevertheless, the Dubai Financial Market was able to strengthen its modest recovery, this time rising 1.08 per cent to 1,505 points, its highest finish for four sessions. It opened weakly, as forecast, but then bounced back to hold above 1,500 points for the second half of the session.
"Volumes were very low, which gives an indication selling pressure is easing on most stocks, particularly the likes of Arabtec and Aldar Properties," said Sherif Abdul Khalek, Beltone Financial institutional trading manager. "This enabled the market to increase slightly, but I don't expect this to turn into a rebound. The market is essentially flat following last week's declines. It has started the week positively because other regional markets, especially Saudi Arabia, have done well, which has boosted local sentiment."
Dubai's blue chips all prospered. Emaar climbed 2.1 per cent to Dh1.91, du and DFM Company surged 6.25 and 2.46 per cent, while Dubai Islamic Bank built on Sunday's gains to add 2.99 per cent. Deyaar increased by 6.25 per cent to Dh0.51 after seeing net annual profits more than double in 2008. Union Properties ended flat.
"Deyaar's results provided some much-needed positive news and helped the stock make good gains on decent volumes compared to its recent average," said Khalek.
Wadah Al Taha, a financial analyst, also welcomed Deyaar's results, but warned that the full figures were required to see from where the firm derived its net profit.
"Investors remain cautious and will want to know the sources of Deyaar's income," said Taha. The top five active companies accounted for three-quarters of Dubai's Dh112 million turnover – the lowest since late August 2005. Emaar was first with Dh25m, followed by Arabtec's Dh21m and DFM Co's Dh16m. Deyaar and Air Arabia also saw trading top Dh10m to complete the quintet and after months of desperate selling, investors should draw encouragement from the fact this group all advanced. All active sectors advanced as gainers outnumbered losers 13:4, with Commercial Bank of Dubai the most significant member of the latter group after plunging five per cent to Dh3.04.
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Source: Business24-7.ae |
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