By: Mahmoud Gamal
Dubai – Mubasher: There are six factors that would define the performance of the UAE stock markets during the second quarter of 2018, analysts told Mubasher.
By the end of Q1-18, the Dubai Financial Market’s (DFM) general index fell 7.7%, while the Abu Dhabi Securities Market’s (ADX) general index rose 4.25%.
Global Stocks
Factors that contribute to the UAE bourses’ recovery from the long-term recession and negativity are getting complicated, market analyst Ziad Al Qaimari told Mubasher.
The global stock markets are witnessing volatile trend and the largest economies are negatively impacted due to the external trade policies followed by US president Donald Trump’s administration, he indicated.
It is worth note that Trump has imposed tariffs on imported steel and aluminium by 25% and 10%, respectively, as well as signed an executive memorandum to impose a tariff of up to $50 billion on Chinese imports.
Financial results
Based on firms’ annual financial results, the current prices of stocks in the local bourses are generally low, compared to the other stock markets in the region, even it has many investment merits, Al Qaimari said.
Heavy liquidity and stable global stock markets will positively impact the local stock markets, he noted.
Liquidity is expected to improve by the anticipated financial results for Q1-18 and the clear valuation of applying the International Financial Reporting Standard 9 (IFRS 9) on the Emirati banks’ results, he highlighted.
Real estate sectors’ stocks are projected to maintain growth, which could bolster the UAE bourses, he added.
Ramadan and summer holiday
For his part, market analyst Ibrahim Al Filkawy said that the UAE bourses have seen a weak performance during Q1-18, as the DFMGI was mostly down and could not settle above 3,542 points and fell to 3,080 points.
The DFMGI may face consecutive drop if it falls below 3,000 points; therefore, it may test 2,600 and 2,400 points, he remarked.
The local bourses, particularly the DFM, lack positive catalysts, he added, forecasting the DFMGI to carry on the bearish trend ahead of the holy month of Ramadan and summer holiday.
Meanwhile, the ADX is likely to fell below 4,660 points and test 4,650 and 4,100 points, Al Filkawy projected.
Translated by: Mai Ezz El-Din
