By: Mahmoud Gamal
Dubai – Mubasher: Stability in UAE stock markets is bound to continue only if long-term institutional investors enter the market, which will support indices against the expected decline after individual investors suffered losses across global markets particularly because of US President Donald Trump’s moves, analysts told Mubasher early Sunday.
The Dubai Financial Market (DFM) closed 1.46% down last week to 3,134.12 points, while the Abu Dhabi Securities Exchange (ADX) gained 0.77% to 4,577.84 points.
Last week, institutional investors were buyers on the DFM, netting AED 30.7 million, but were net sellers with AED 48.06 million on the ADX during the same session.
US and European bourses closed in the red Friday, weighed by mounting pressures of a trade war after Trump imposed over $50 billion in tariffs on China, while Beijing threatened to retaliate. A data scandal with Facebook also saw the social network’s market cap fall by $58 billion over the course of last week.
UAE bourses are expected to see an increase in institutional investments in the last two sessions of the week after a state of anticipation and declines recedes as investors look to global markets, commented technical analyst at the African Economic Council Mona Mostafa.
She noted that institutional investments will focus on companies with good operating performances and are likely to distribute high dividends, adding that the positive forecast development of the UAE economy, as well as the government’s efforts in attracting foreign investors, will support the bourse and listed stocks.
The ADX moved in a narrow channel last week, closing higher at 4,577.84 points, but is expected to see resistance at 4,595 this week, Mostafa said.
As for the DFM, the analyst said it had suffered profit-taking and shed off most of its weekly profits, forecasting support for the index at 3,054 and resistance at 3,194 points.
Meanwhile, senior financial analyst at MenaCorp Issam Kassabieh expects UAE stock markets to see declines this week on the back of a drop on Wall Street, whose weekly losses were the worst since January 2016, owing to the trade war fears.
Local market investors are likely to sell stocks for companies who have unresolved financial problems, Kassabieh said, highlighting that investors do not focus on annual dividend distributions.
Investors, however, must try to benefit from the current low price levels, he added.
Translated by: Nada Adel Sobhi
