Dubai index fell a per cent on Sunday, continuing its recent weakness, as traders braced for the results season starting with Emirates NBD.
The Dubai Financial Market General Index (DFMGI) closed 0.99 per cent lower at 3,301.84, after falling to a low of 3,268.75.
“The markets are weak across the board. The reason why Dubai is weaker is because Dubai is more liquid, and also the index has profit to take,” Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities said. The Dubai index has gained more than 5.8 per cent so far in the year, making it the top gainer regionally.
But the Dubai index is near its critical point technically and analysts expect more weakness in the gauge. “DFM index has almost reached our target of 3,250, some buying activity is taking place now from speculators, if this support doesn’t hold we could fall to the next one around 3,000,” Hisham Khairy, Head of Institutional Trading, Menacorp said in a note.
“Volumes have picked up a bit in today’s session which isn’t a great sign, futures market would be great in current conditions and is actually printing higher volumes from investors who are shorting the market,” Khairy said. Dubai volumes came in at Dh261 million, higher compared to Dh170 million seen last week.
In stock specific action, Gulf Finance House closed more than 2.83 per cent lower at Dh1.03. Emaar Properties closed more than 1 per cent lower at Dh6.60.
Arabtec closed 3.60 per cent lower at Dh1.34. Air Arabia closed 2.31 per cent lower at Dh1.27.
The Abu Dhabi Securities Exchange General Index closed 0.73 per cent lower at 4,315.62.
“If we are looking for stock ideas, from my perspective, you look for results. People expect Emirates NBD to be slightly down quarter on quarter. If the third quarter results are the same as second quarter, then people may think that the worst is behind us” said Manibhandu. On Monday, Emirates NBD is slated to announce the third quarter results.
“If you have not sold, I think its probably too late. If you have sold, and if you have a lot of cash, then you may want to buy banking stocks, which may surprise on the upside,” Manibhandu said.
Saudi Arabian stocks led regional losses weighed by weakness in banking stocks. The Tadawul index closed 1.08 per cent lower at 5,632.69. Bank and Financial services index was down 1.6 per cent to be at 12,225.01.
Elsewhere in the region, the Qatar exchange index closed 0.21 per cent lower at 10,367.74. The Muscat securities MSM 30 index closed 0.16 per cent lower at 5,651.07. Egyptian stocks eased after gaining nearly 4 per cent in the previous session. Egyptian stocks fell 0.85 per cent to end at 8432.41. The Egyptian index has gained more than 20 per cent so far in the year since January 1.
Apart from Dubai, Egypt has been a top performer, but Manibhandu said “who wants to be in a country that is going to have devaluation and a country has control over capital moving in and out of the country.”