Trade values stay low as indices move sideways

Markets expected to gain in the short term, with one expert saying he considers many stocks oversold

Traded values remained low in the UAE’s equity markets, with less than Dh200 million traded on the Dubai bourse yesterday as the main indices moved sideways.

The Dubai Financial Market (DFM) index inched up 0.45 per cent to reach 3,611.22 as most stocks ended the day little changed. Most of the actively traded stocks, such as those of Emaar, Damac, Drake & Scull International, and Dubai Islamic Bank gained less than 1 per cent.

“The market has been moving sideways for quite some time, and that’s because trade values are low, so there isn’t much to drive share prices higher or lower. Trade values do tend to be low in August as many people are on holiday, but I think they’re particularly weak this summer,” said technical analyst Osama Al Ashry.

Wary investors

He added, “Oil prices don’t seem to be moving higher, and there’s also uncertainty due to the geopolitical environment, which might be making foreign investors wary.”

Brent crude oil prices were relatively flat yesterday at just over $51 after rising slightly in early trade on indications that supply growth may be levelling off, especially from the United States.

Meanwhile in equities, the Abu Dhabi Securities Exchange (ADX) general index fell 0.46 per cent to reach 4,474.07, with only Dh66 million traded in that market.

Oversold stocks

Al Ashry said he expected both the DFM and the ADX indices to rise in the short term especially as there are lots of oversold stocks.

He said the DFM index could reach 3,780 while the ADX index is expected to reach 4,720, both targets possibly seen in September.

“I think these could be the highs of this year in each market. There are plenty of oversold stocks in the market, so that could create buying opportunities. Those stocks include GFH, Drake & Scull International, Dubai Islamic Bank, Aldar Properties, and Waha Capital,” he said.

In Dubai, GFH Financial Group topped the market in terms of traded values, accounting for 36 per cent of the Dh182 million traded in the market.

The company’s share prices fell 1.06 per cent to Dh1.86.