By: Mahmoud Gamal
Dubai – Mubasher: UAE stock market indices and stocks are expected to test important support levels this week amid increased selling, analysts told Mubasher.
Many companies have reported accumulated losses or are undergoing a restructure, which in turn is affecting their stock prices, they added.
Last week, the UAE’s twin bourses retreated to significantly low levels, with the Dubai Financial Market (DFM) sliding by as much as 3.12% or 94.8 points to close the week at 2,947.99 points, shedding the 3,000-point level for the first time since early 2016.
Meanwhile, the Abu Dhabi Securities Exchange (ADX) retreated 2.99% or 140 points to close at 4,556 points, its lowest level in over a year.
Commenting on performance, Arab market technical consultant Ibrahim Al-Filkawy said that “last week’s surprises in the UAE and the DFM in particular followed several companies’ announcements of accumulated losses” prompting a capital cuts and investor concerns.
The analyst forecast the DFM would decline to between 2,950 and 2,900 points this week, noting that these levels would act as rebound levels, allowing for a temporary rise, which if successful may prompt further gains towards 3,100 points.
Al-Filkawy further expected government portfolios and institutions are likely to begin collecting stocks, which have fallen to low prices during the past period.
Meanwhile, technical analyst at the African Economic Council Mona Mostafa said that the UAE bourses had suffered major pressures from increased selling by foreign institutions particularly on blue chips, which resulted in these stocks falling below the stop-losses levels and heightening concerns in the markets.
Mostafa forecast that UAE bourses would extend their profit-taking trend towards new support levels.
For the ADX, Mostafa expects the general index to see support between 4,525 and 4,490 points. If the index declines further it will target 4,390 points, while resistance will be seen at 4,630 and 4,650 points.
As for the DFM, the analyst forecast support at 2,810 points, which if broken will result in further declines towards 2,600 points, whereas resistance is expected at 3,066 points.
Translated by: Nada Adel Sobhi
