FAB shares drag ADX to four-month low

The National - News - - IN DEPTH -

Abu Dhabi’s stock mar­ket fell sharply to a four-month low on Thurs­day be­cause of a slide in shares of First Abu Dhabi Bank, the UAE’s largest lender, just be­fore MSCI dou­bled its weight­ing of the stock in its in­dexes.

The Abu Dhabi in­dex lost 2.3 per cent to 4,770 points amid record vol­ume in FAB, which slumped 3 per cent. A to­tal of 57.9 mil­lion shares in the bank traded, by far the high­est since its list­ing in April 2017.

MSCI de­cided on the weight­ing in­crease in its semi-an­nual in­dex re­view in the mid­dle part of No­vem­ber.

Arqaam Cap­i­tal es­ti­mated the in­crease, which takes ef­fect at the end of this week, would at­tract $524 mil­lion of pas­sive funds into the stock.

The stock has per­formed well this year so many in­vestors took the in­flux of pas­sive funds into it as an op­por­tu­nity to take prof­its, said Mo­hamad Al Hajj, head of re­gional eq­uity strat­egy for EFG Her­mes.

The com­pany’s stock is still up 32.7 per cent year-to-date com­pared to an 8.5 per cent rise in the Abu Dhabi in­dex.

Abu Dhabi Na­tional Ho­tels rose 3.2 per cent in thin vol­ume af­ter say­ing its deal to buy ho­tels from Dubai’s Emaar Prop­er­ties was val­ued at 2.2 bil­lion dirhams ($599 mil­lion). Emaar lost 2.2 per cent.

Mid­dle East funds have be­come more de­fen­sive af­ter No­vem­ber’s oil price plunge and now ex­pect on bal­ance to trim their eq­ui­ties ex­po­sure slightly while in­creas­ing their hold­ings of fixed in­come, a monthly Reuters poll showed on Thurs­day.

The poll of 13 lead­ing re­gional fund man­agers, con­ducted over the past week, found 15 per cent now ex­pect to raise eq­uity al­lo­ca­tions in the next three months and 23 per cent to re­duce them, the sur­vey found.

Saudi Ara­bia’s in­dex rose 0.9 per cent to 7,703 points on Thurs­day, boosted by banks. Al Ra­jhi Bank rose 1.3 per cent while the largest lender, Na­tional Com­mer­cial Bank, climbed 3.1 per cent.

The Dubai in­dex slid 0.6 per cent to 2,669 points, de­clin­ing for a sixth straight day as real es­tate firms con­tin­ued to sag. Damac Prop­er­ties dropped 3.6 per cent.

Dubai In­vest­ments shed 2.2 per cent to a five-year low; the stock has been slid­ing af­ter MSCI de­cided to move the stock to its UAE small cap in­dex from its UAE stan­dard in­dex.

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