By: Mahmoud Gamal
Dubai – Mubasher: The Dubai Financial Market (DFM) retreated this week, weighed primarily by ongoing news pertaining to The Abraaj Group, its liquidation, lawsuits, and exposure to companies listed on the bourse.
The DFMGI slid 3.6% or 107.2 points to close the week at 2,821 points. Turnover also dropped this week to AED 135.53 million from AED 436.65 million last week, while volumes declined to 135.7 million shares against 288.41 million.
Concerns and warnings
The week was significantly impacted by investor concerns as few companies unveiled the level of their exposure to Abraaj’s ongoing crisis, commented Fadi El-Ghattis, CEO of Mindcraft Consultants.
Many companies have not revealed their exposure to Abraaj, with the exception of Air Arabia, Dana Gas, and Union Properties, El-Ghattis told Mubasher, stressing that investors and traders were eager for official announcements rather than rumours and speculation.
Another source of worry this week arose from fears that construction companies might see a new financial crisis, particularly after the ongoing developments in Drake & Scull International’s (DSI) stock, which suffered drops of 10% for three sessions this week, the analyst said, indicating that the stock was being manipulated.
The real estate sector, overall, is witnessing a slowdown due to fewer sales and rising supply, a problem the UAE government has attempted to solve by offering new facilities to foreigners, El-Ghattis added.
From a technical perspective, the analyst said he did not expect the negative trend to end, noting that if the DFMGI falls below 2,800, it was likely to continue declining towards 2,780 and 2,750 points.
If the DFMGI drops below the level of 2,700 points, then this may open the way for further declines towards 2,500 points, he said.
Sectors and stocks
The investment sector led the DFM’s fallers this week, losing 5.84% after Dubai Investments dropped 5.94% to AED 2.02, while the DFM Company’s stock was down 5.4% to AED 1.02.
The real estate sector tumbled 4.66% after DSI plunged 30.28% on the back of unclear news regarding the firm’s former chairman, while DAMAC Properties plummeted 10.09% to AED 2.28 and Emaar Properties fell 4.28% to AED 5.14.
The transport sector lost 4.5% after Gulf Navigation retreated 7.2%. Air Arabia slid 6% after uncovering AED 1.2 billion in exposure to Abraaj.
The banks sector shed 1.15% as Dubai Islamic Bank (DIB), Emirates NBD, and GFH dropped 1.4%, 1.6%, and 9.6%, respectively.
Translated by: Nada Adel Sobhi
