UAE shares rally for second day, so is it time to sell?

THE DFM INDEX HAS GAINED 1.98% IN THE PAST TWO SESSIONS

The UAE bourses have been closing in the positive zone over the past two sessions, but analysts want consistency in price and volume recovery before building long positions.

The Dubai Financial Market general index 0.64 per cent higher yesterday at 2,549.93, after rising 2.62 per cent in the last three sessions. Traded volume hit 200 million shares, the highest volume recorded this year.

“This recovery [on the Dubai bourse] is welcome but unless we see a sustained pickup in buying, traders will opt to sell on rallies,” said an analyst who did not wished to named. The Dubai index has gained a mere 0.80 per cent since the start of the year. “We are cautiously optimistic on Dubai market. We see a lot of value here, but investors need to take a measured approach in terms of phasing their investment,” Vrajesh Bhandari, portfolio manager with Al Mal Capital said. Emaar Properties has been behind this rally in Dubai. Emaar Properties extended gains for a second session, closing 1.98 per cent higher at Dh4.18. The stock has gained 8.57 per cent in the past two sessions. “A recovery towards Dh4.30-4.4 will attract renewed selling pressure,” said Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities, in a note. Emaar Development closed more than 3 per cent higher at Dh3.82. Emaar Malls closed 1.89 per cent higher at Dh1.62.

In other stocks, Gulf Finance House closed 1.30 per cent higher at Dh0.933. Dubai Islamic Bank closed 0.20 pe rcent higher at Dh5.06. Air Arabia extended losses for another session, closing 1.08 per cent lower at Dh0.92. “Air Arabia’s misfortune brought by its exposure to Abraaj led the stock to its bottom limit in the early hours only to slightly recover later as investors sold off the stock not only on the back of the impairment posted but also discounted the fact the airline wouldn’t be paying dividends based on their current cash position,” Issam Kassabieh, Senior Financial Analyst at Menacorp said.

The Abu Dhabi Securities Exchange general index closed at 0.65 per cent higher at 5,069.07. The Abu Dhabi index has gained 3.1 per cent so far in the year, building on to 11 per cent gains seen last year. Aldar Properties closed 3.64 per cent higher at Dh1.71. First Abu Dhabi Bank witnessed a minor rally, closing 0.81 per cent higher at Dh15.02. Etisalat closed at Dh16.94, up 0.59 per cent.

Upward bias

The Egyptian index led regional gains after the central bank announced a 100 basis points cut in interest rates, which was more than expected. The Egyptian EGX 30 index was 1.48 per cent higher at 15,206.33. “The 100 basis points cut was more than expected and is very comforting. As expected, the Egyptian stocks are up. Going forward, there would be an upward drift until the next inflation reading,” Bhandari said. Palm Hills and Ezz Steel shares were up more than 5 per cent.