By: Mahmoud Gamal
Dubai – Mubasher: The UAE stock markets are likely to maintain the bull run in the second quarter of 2018 on the continuous long-term institutional investments, analysts told Mubasher.
By the end of the first quarter of this year, the Dubai Financial Market’s (DFM) general index shed 7.7%, while the Abu Dhabi Securities Market’s general index (ADX) rose 4.25%.
Operational performance
The UAE bourses, mainly the ADX, are expected to witness further institutional investments during Q2-18, technical analyst at the African Economic Council Mona Mostafa said.
Institutional investors will be directed towards stocks with good operational performance and generous dividend distributions, Mostafa forecast, adding that heavy liquidity may propel stock indices to rise again.
The local stock markets are likely to see a calm trading during the beginning of Q2-18 as buyers could realise the continuous strength of sellers which started to fade away, she projected.
The sideways trend has dominated the main indices of the UAE bourses by the end of Q1-18, which had entered correction by the beginning of the year to see an upward trend as a positive rebound, she commented.
Some blue chips have shown a significant performance amid large dividends distribution and launching new Initial public offerings (IPOs) over the past three months, against selling pressures and profit-taking, she highlighted.
The DFMGI is predicted to carry on the sideways trend until it sees new market-boosting catalysts that encourage traders to pump liquidity, she remarked.
Meanwhile, the ADX’s general index, which hovers around 4,663 points, is expected to move upwardly towards 4,751 points, Mostafa noted.
New IPOs
For his part, CEO of Al Safwa Mubasher Ehab Rashad said that launching new IPOs could highly attract institutional and retail investors to inject fresh liquidity into the UAE bourses.
The performance of the local stock markets is likely to remain weak during Q2-18 if it has not witnessed any new positive catalysts to lure investors, Rashad indicated.
The absence of catalysts, lack of institutional investments, and retail investors' disinterest in injecting liquidity have adversely impacted the performance UAE’s twin bourses in Q1-18, he highlighted.
Saudi Stock Market.
The UAE bourses are projected to see a calm phase amid the thriving number of investors entering the Saudi Stock Market (Tadawul), senior financial analyst at Menacorp Financial Services Issam Kassabieh said.
Tadawul is currently offering great investment opportunities after FTSE Russell has added Saudi Arabia into its index of emerging market, Kassabieh noted.
The local stock markets are likely to see weak trades ahead of the summer and the holy month of Ramadan, he forecast.
Translated by: Mai Ezz El-Din
