By: Mahmoud Gamal
Dubai – Mubasher: The prices of UAE stocks have reached attractive levels after some foreign investors began selling their stocks on worries concerning the future of Drake & Scull International (DSI), which has recently seen a steep decline, and The Abraaj Group’s crisis, analysts told Mubasher. They also highlighted fears rekindled by the trade war which in return increased the loss of the global stock markets.
Investors in the twin UAE stock markets are in need for a robust reassurance from the regulatory bodies to start re-injecting fresh liquidity into the equity markets and benefiting from good investment opportunities, they added.
By the end of the previous week, the Dubai Financial Market (DFM) went down 3.6% to 2,821 points, while the Abu Dhabi Securities Exchange’s (ADX) index rose 0.5% to 4,560 points.
Negative mood
The unexpected heavy selling pressures on DSI’s stock sparked a negative mood in the UAE bourses over the last week, Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI), commented.
The Abraaj Group's crisis has worsened the situation, he added. The recurrence of disclosure and transparency mistakes and the absence of regulatory bodies’ measures regarding this matter have discouraged traders to invest in the local stocks, Wadah mentioned.
Tackling the crisis
The UAE stock markets, the regulatory bodies, and investors have to quickly work on ending the crunch for the interest of small investors in the companies that announced their exposures to Abraaj’s crisis, Tariq Qaqish, managing director of asset management at Menacorp, commented.
In the same vein, he ascribed the current downturn in the local stock markets to the reluctance of the listed firms to uncover their exposure to the ailing private equity firm. However, Qaqish has stressed that the current price levels of the stocks will spur the UAE equity markets to see a strong resistance over the coming period.
Translated by: Kholoud Mohamed Hussein
