By: Mahmoud Gamal
Dubai – Mubasher: UAE stock markets are expected to see some volatility this week amid geopolitical tensions, while investors await their companies’ financial results for the first quarter of 2018.
By the end of last week, the Dubai Financial Market (DFM) closed 0.36% higher to 3,094.4 points on the back of Dubai Islamic Bank (DIB) and Emaar Properties, whereas the Abu Dhabi Securities Exchange (ADX) declined 0.76% to 4,653.03 points.
We expect the UAE bourses to see some volatility this week as tensions rise in Syria after the United States launched air missiles against the Arab country, commented technical analyst at the African Economic Council Mona Mostafa.
She noted that last week, the DFM which closed higher last week was likely to see foreign investors purchase stocks this week as the market is currently trading close to important support levels.
Despite the relative stability seen on the DFM, the bourse remains within a falling trend, forecasting that the market will commence the week in the green in an attempt to extend its positive performance.
This will, however, be dependent on the level of liquidity and the emergence of new catalysts that can push it above current resistance levels, she added.
As for the ADX, Mostafa expects the general index to enter a sideways channel that will most likely result in profit-taking, adding that the Abu Dhabi market’s current resistance is at 4,725 and 4,778 points, while support will be seen at 4,600 and 4,570 points.
Meanwhile, Waddah Al Taha, member of the National Advisory Board of Chartered Institute for Securities & Investments (CISI), agreed with Mostafa that investors were awaiting first quarter financial results, highlighting that these would support the twin markets’ performance significantly.
Investors had shrugged off the positive annual results, which negatively affected the UAE’s bourses, pushing them to their worst quarterly performance in almost a decade, the analyst stated.
Bahrain-based investment bank SICO forecast in a note that around 20 UAE listed companies would see an 8% year-on-year rise in profits to a combined AED 4.13 billion ($15.2 billion) in Q1-18.
As for the impact of the geopolitical tensions, Al Taha said companies listed on the DFM and ADX were capable of withstanding the news during this week’s trading sessions.
Translated by: Nada Adel Sobhi
