By: Mahmoud Gamal
Mubasher: The opinions of a number of financial analysts varied when discussing the expected trend of the UAE markets in the upcoming year with Mubasher.
Since the beginning of 2016, the Dubai Financial Market (DFM) gained 13%, while the Abu Dhabi Securities Exchange (ADX) grew by 4% in the same period.
Oil prices are expected to be the main drive of the stock markets all across the region, and especially in the UAE, with the reflation plan and the effects of the OPEC oil output deal, which will decrease production by 1.2 million barrels per day beginning January.
The vice chairman of research unit in CAMCO, Raed Diab, told Mubasher that ADX saw gains in 2016 on the back of the real estate, telecom, and energy sectors.
However, ADX performance differed throughout the year, as it was affected by oil prices fluctuations and a series of global instability, he added.
The anticipated merger between the National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) could give an extra momentum to the Emirati banking sector in 2017, said Diab.
As for DFM, Diab expects the market to be impacted by the strength of the US dollar, and believes projects will recover by H2-17, explaining that in 2016 the Dubai Financial Market saw a rise of real estate, banks, and services stocks, he added that DFM is the only market in the GCC that is not directly affected by oil.
Meanwhile, the CEO of Think Financial Studies (TFS), Fadi El Ghattis, attributed DFM horizontal trend in 2016 to the companies’ positive financial results which represented a pressure force especially in real estate and banks.
El Ghattis expects the market to see some ups and downs in Q1-17, with the main index reaching levels of 3,000 to 3,200 points once more, adding that with the recent decision by the US federal reserve to raise interest rates, this could weaken liquidity in the UAE stock markets, and negatively impacting the banks financial results.
Broker and expert Mohamed Al-Naggar advised investors to go for the small stocks in 2017, which are currently making big gains, and to invest in the banks sector with high annual returns in sight according to forecasts.
