DFM gains, still in ‘high risk’ area
INDEX DOWN 14.5% ON YEAR-TO-DATE BASIS AMID SOURED SENTIMENT
The Dubai bourse’s main index rose yesterday as share prices of blue chip Emaar inched up and many mid-cap stocks saw their prices jump.
The Dubai Financial Market (DFM) index ended the day 0.67 per cent higher, at 2,880.42, though the index is still 14.5 per cent lower on a year-to-date basis, according to Bloomberg data. The market capitalisation of shares traded in the last five sessions reached about Dh8.6 billion.
“There was some stability in the performance of the DFM index today, but trade values in the market are still weak. Between 2,800 and 2,900, the index is still at a high-risk area, I believe, and it’s still trading near its lowest levels,” said technical analyst Osama Al Ashry.
He added that the index might see some correction towards the 3,000 mark, but it is likely to drop back from that level. “There seems to be a wave of pessimism in global markets, so that’s affecting sentiment. Plus, there’s rarely much movement in prices in the summer period, so I won’t be optimistic until the index goes above 3,080, but this is going to be tough,” Al Ashry said.
He added that the support level for the index is at 2,820 — only 60 points away from yesterday’s closing level. If the support level is broken, the index could fall to new lows at 2,720 and 2,550.
Attractive valuations
The expected decline comes even as analysts say many stocks in Dubai are over-sold and have attractive valuations. Concerns about exposure to Abraaj, the private equity group that filed for provisional liquidation in June, have not helped spur any buying activity, however.
Drake and Scull International’s (DSI) share prices gained 1.59 per cent after it announced it is appointing its chief financial officer in a new role as chief restructuring officer. GFH Financial Group jumped 7.52 per cent and was the most actively traded stock, accounting for nearly 25 per cent of the Dh236 million traded on DFM.
The Abu Dhabi Securities Exchange (ADX) general index ended the day 0.2 per cent higher at 4,603.20.