UAE indices bound in narrow range

DFM INDEX DIPS 0.3% AS TRADE VALUES FALL TO DH140M WHILE THE ADX GENERAL INDEX INCHES DOWN 0.07%

The UAE’s main stock indices continued to trade within narrow ranges yesterday as trade values dwindled further amid a lack of catalysts to drive much buying or selling activity.

The Dubai Financial Market (DFM) General Index dipped 0.31 per cent to close at 2,753.29 as trade values on the bourse fell to Dh139.7 million. Most stocks ended in the red.

Meanwhile, the Abu Dhabi Securities Exchange (ADX) General Index inched down 0.07 per cent to close at 4,888.79.

Technical analyst Osama Al Ashry said he expected to see further declines on the DFM index, a view that is being echoed by other analysts who believe the bourse will face more pressure.

“What we’ve been seeing with the DFM index is that one support level leads to another. The next support level for the index is at 2,744, and then 2,580, which is the one we’re anticipating,” he said.

“I wouldn’t be surprised to see the index reach [2,580] in the next quarter if liquidity remains weak and trade activity remains weak.”

The DFM index has now shed over 18 per cent of its value since the beginning of this year.

Yesterday, heavyweights Emaar and Dubai Islamic Bank moved by less than 1 per cent, with Emaar rising 0.63 per cent to close at Dh4.81 as DIB slid 0.57 per cent.

An analyst note from First Abu Dhabi Bank Securities said the trend for Emaar’s share prices remains bearish, “headed towards the Dh4.50 target zone.”

Only a closing price above Dh5 would turn the trend up for the stock, the note said.

Gains going forward

In Abu Dhabi, trade concentrated on powerhouses including First Abu Dhabi Bank, etisalat, and Aldar Properties. Dana Gas also inched up 0.88 per cent.

Al Ashry said he expected to see some gains going forward on the ADX index as well as in some stocks, including Dana Gas, Abu Dhabi Commercial Bank and Bank of Sharjah.

“The next resistance level for the ADX index is at 5,080, but sentiment across the Middle East’s markets is negative, so that’s not really allowing the ADX to rise,” he said.

In Egypt, for example, the EGX 30 index has been on the decline since late April, and fell 12 per cent between August 30 and September 19 alone.