By: Mahmoud Gamal
Dubai – Mubasher: The Dubai Financial Market (DFM) recorded a sharp drop in trades in December, pressured by its leading sectors particularly real estate and investment.
The DFMGI fell 1.46% or 50.1 points to close the month at 3,3370.07 points, its lowest level since June.
The DFM’s liquidity fell 9% month-on-month to AED 6.32 billion in December from AED 6.95 million, while volumes registered a 1.4% decline to 3.57 billion shares versus 3.62 billion shares in November.
Commenting on the DFM’s December performance, market analyst Bayan Nabil noted that the DFMGI had continued its descent amid average liquidity, which does not indicate any major buying, rather that investors were holding back on trading in the market over the course of the month.
One of the main reasons behind the December decline is traders and investors turning their focus to digital currencies, which have taken the trading scene by storm, with some surging to historic highs, the analyst told Mubasher. This has resulted in the absence of stock buyers, he added.
The transport sector led fallers this month, after Aramex retreated 12% to AED 4.3, while Gulf Navigation dropped 6.5% to AED 1.3. Similarly, the consumer staples sector shed 4.5% on the back of Marka’s 11.12% plunge to AED 0.551 and DXB’s 4% decline.
Meanwhile, the real estate sector lost 3.6% in December after Emaar Development’s stock slid 9.1% to AED 5.09, while Emaar Properties’ stock tumbled 8.07% to AED 6.9.
Nabil also noted that one of the reasons for the DFM’s drop was the dividends announced by Emaar Properties, which investors deemed disappointing.
Emaar Properties’ board recently recommended an extraordinary dividend to shareholders totalling AED 4 billion.
The investment sector slipped 0.64% after Dubai Investments declined 2.03% to AED 2.41 in December.
On the positive side, the telecommunications sector led gainers adding 2.2% after du saw a similar rise, following a decision by the Telecommunications Regulatory Authority (TRA) that the UAE’s upcoming excise tax will not have a major impact on the sector’s prices.
Weekly rebound
As for the DFM’s weekly performance, the DFMGI increased 0.15% to 4.9 points to 3,3370.07 points, backed by its banks sector which added 0.21% on the back of Emirates NBD’s 0.6% gain to AED 8.2 as well as the investment sector’s DFM Company, which grew 0.9% to AED 1.12 this week.
NamaaZone CEO Iyad Aref forecast that the DFM’s performance would improve in the coming sessions, particularly if the index passes 3,400 points, a level that will boost investor confidence in the market.
From a technical perspective, UAE-listed stocks have fallen to significantly low and attractive prices, the analyst told Mubasher, indicating that Emaar Properties’ stock is among those that are attractive to buy at this point.
The Securities and Commodities Authority (SCA) has announced that the UAE bourses will be closed on Sunday, 31 December and Monday, 1 January, with markets to resume trading on Tuesday, 2 January 2018.
Translated by: Nada Adel Sobhi
