DFM index inches up after volatility

DSI SHARES RISE 3.3%, HAVING FALLEN MORE THAN 41% SINCE JUNE 24

Dubai stocks rose yesterday as investors sought to buy under-valued stocks in a market whose main index has shed over 15 of its value so far this year.

The Dubai Financial Market (DFM) ended the day 0.8 per cent higher at 2,861.16 as most stocks ended in the green. Drake and Scull International (DSI), whose share prices have plunged more than 41 per cent since June 24, ended 3.29 per cent higher at Dh0.627.

DSI was the most actively traded stock on the Dubai bourse, accounting for more than a quarter of the Dh249.1 million traded on DFM.

“[The Dubai market] is definitely over-sold. There are expectations that investors will look at the valuations and start accumulating stocks due to the under-performance of those stocks,” said Tareq Qaqish, managing director of Menacorp’s asset management division.

Fund managers have been saying for a few months that Dubai stocks mostly have attractive valuations, but that hasn’t driven much buying activity as investor sentiment remains negative.

Sentiment globally is already soured by trade tensions between the US and China. Additionally, investors have been wary of emerging markets lately as the US dollar strengthens.

“Lots of investors in the UAE are on the side. They have cash, but they’re waiting for the time to get back into the market,” Qaqish said.

He added that on the medium term, recent economic stimulus programmes announced by the UAE government should help investor appetite and the country’s stock markets.

In Dubai, Emirates NBD share prices rose 1.01 per cent, as Emaar gained 1.81 per cent, Air Arabia went up 1.63 per cent, and Gulf Navigation ended 3.68 per cent higher.

Meanwhile, the Abu Dhabi Securities Exchange (ADX) general index rose 0.53 per cent on Tuesday to end at 4,593.90. Stocks on the Abu Dhabi bourse also mostly ended in the green, with First Abu Dhabi Bank inching up 0.41 per cent, as etisalat gained 1.21 per cent, Abu Dhabi Commercial Bank rose 0.71 per cent, and Aldar Properties ended flat.