By: Mahmoud Gamal
Dubai – Mubasher: Investors across the UAE’s two bourses are awaiting news of companies’ upcoming expansions and initial public offering (IPO) updates in the coming sessions, analysts told Mubasher.
Such news will boost liquidity and prompt market gains, they added.
On Wednesday, the Dubai Financial Market (DFM) closed up 0.25% to 3,570.2 points, while the Abu Dhabi Securities Exchange (ADX) added 0.31% to 4,441.13 points.
UAE markets are witnessing a notable recession, an unjustified one too, MenaCorp financial analyst Issam Kassabieh told Mubasher, indicating that although several stocks have fallen to significantly low prices, portfolios have preferred to maintain their distance from taking risks and investing in stocks.
Liquidity in UAE markets dropped to notably low levels on Tuesday, coinciding with news that Emaar Development’s assets were valued at AED 24 billion.
Emaar Properties’ stock gained 0.47% and closed at AED 8.54 on Tuesday, coming in second as the most active in terms of traded value on the DFM with AED 26.4 million.
Emaar called for an ordinary general meeting (OGM) to be held on Sunday, 15 October to discuss transforming its real estate development subsidiary Emaar Development into a joint stock company and listing 30% of its shares on the DFM.
Reports estimated that the IPO value of Emaar’s real estate development arm to range between AED 22 billion and AED 28 billion.
Air Arabia’s positive forecasts
Despite the current market recession, several portfolios are on the lookout for companies’ expansion news, including Air Arabia’s, which recently announced new destinations as well as positive forecasts for its third quarter results, Kassabieh told Mubasher.
Air Arabia CEO Adel Al Ali said previously that his company had expected to see strong performance during the summer season, which would continue well into the third quarter.
Such news of listed companies’ investments along with anticipated statements regarding new IPOs by Emaar and Abu Dhabi National Oil Co. (ADNOC), and third quarter disclosures, were set to change the markets’ direction and prompt new gains, the analyst highlighted.
QIA divestitures
Kassabieh told Mubasher that there were news and rumours that the Qatar Investment Authority (QIA) was planning to exit several of its investments in the UAE, amid the continued political rift between Qatar and neighbouring GCC members.
The QIA’s most notable investment in a DFM-listed stock is in DXB Entertainments, in which the QIA holds an 11.02% stake, according to the analyst.
Technical view
Commenting from a technical perspective, analyst Ahmed Al Attar said that the DFM’s continued rebound is bound by surpassing the 3,573-point level, adding that maintaining a position above that level will boost the DFM higher towards 3,600 and 3,625 points.
On the other hand, a close below 3,560 points will drag the DFM’s benchmark index towards 3,437 and 3,406 points.
As for the ADX, stability above 4,420 points will boost the market higher, whereas a drop below that level will prompt declines towards 4,355 and 4,373 points.
Translated by: Nada Adel Sobhi
