By: Mahmoud Gamal
Trading activity of foreign investors in the UAE stock markets leaned towards buying during the first quarter of 2017, which reflects the rise of opportunities in Emirati markets despite the instability in global markets.
Foreign investors’ purchases in the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) totalled AED 28.26 billion in the first quarter of 2017, compared to sales of AED 27.71 billion, with net purchases of AED 550 million.
Foreign purchases made up 34.25% of total transactions seen in both markets with a value of AED 82.5 billion.
Analysts have considered the rise in foreign investments in the UAE bourses a sign that shows seeking high annual returns and cash dividends.
Financial analyst, Hareb Omar, said that foreign activity in DFM during Q1-17 saw two stages, the first was prior to the financial results announcement by the market’s blue chip stocks, when it saw relatively high levels of liquidity.
Foreign liquidity was then affected by the announcement of last year’s financial results by a number of companies led by Arabtec, which saw losses in 2016, leading to excessive selling by the foreign investors, Omar noted.
Market analyst, Mahmoud Diab, said that Arab investors preferred ADX to DFM in the last period to achieve the highest available returns, especially with the fluctuations seen in a number of stocks below the level of AED 1, which are mainly in the industry, insurance, and investment sectors.
Diab noted that Arab and foreign portfolios was focused on this category after news of merger deals, and an improvement of the insurance sector’s outlook.
Meanwhile, local investors leaned towards selling, netting AED 550 million through total sales of AED 37.88 billion, and purchases of around AED 37.33 billion.
Institutional purchases netted AED 20.74 billion, in both markets, while individuals were net sellers at AED 570,000.
Institutional investment is expected to continue in targeting blue chip stocks, as it reach high levels, Diab indicated, adding that speculation will dominate the banking sector in anticipation of Q1-17 financial results.
