By: Mahmoud Gamal
Dubai – Mubasher: The UAE’s stock markets are expected to flourish in 2018, amid improved oil prices, which stabilised above $60 in 2017 and various reports promising a stronger national economy, while the projects of the Expo 2020 Dubai are progressing.
In 2017, the Dubai Financial Market’s (DFM) general index dropped 4.5%, while the Abu Dhabi Securities Exchange’s (ADX) general index tumbled 4%.
By the end of the year, selling pressure on blue chips dragged down both markets, amid lower buying transactions and limited trading, which can be mainly attributed to the unstable geopolitical situation in the GCC, analysts told Mubasher.
These pressures negatively affected indices, whereas the increase in oil prices and the recovery of global markets were not reflected on the UAE’s stock markets, said technical analyst Jamal Ajaj, Al-Sharhan Centre’s general manager.
Blue chips, such as Emaar Properties, Etisalat, and First Abu Dhabi Bank (FAB), were no better and tumbled, weighing on the general indices, the analyst added.
Investment awareness
The Securities and Commodities Authority’s (SCA) efforts to promote investors' investment awareness could boost the UAE's bourses in 2018, said Waddah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI).
The anticipated initial public offerings (IPOs) and mergers, especially in the banks sector, will support the stock markets in the next year, Al-Taha added.
Expo 2020
Stock markets in the UAE will bet on the growth of oil prices, which jumped between 10% and 15% in 2017 and finally stabilised above $60, to attract more investors, Fadi El-Ghattis, MindCraft Consultants’ CEO, remarked.
Investor concerns, particularly foreigners', over the geopolitical tension in the GCC has caused the negative performance of the UAE’s markets in 2017, he added.
The rapidity of executing Expo 2020 projects is one of the main reasons behind the optimism regarding 2018's market performance, El-Ghattis noted.
Technically, the bourses may level up, especially the DFM, whose general index could reach 4,000 points in the coming year, El-Ghattis stated.
More active trading
The strength of the Emirati economy could represent a solid ground for a good outlook for the stock markets added to the safe investment environment, said Eyad Al Bariqi, director general of Al Ansari Financial Services.
The DFMGI is expected to see a "remarkable" progress in the beginning of 2018, which could raise its ceiling to a range between 3,600 and 3,700 points, technical analyst at the African Economic Council Mona Mostafa explained.
Meanwhile, the ADX’s general index will likely see resistance at 4,500 points and support at 4,230, the analyst concluded.
Translated by: Muhammad Khalid
