By: Mahmoud Gamal
Dubai – Mubasher: It is unlikely that UAE bourses will continue their declines this week as optimism returns to the markets particularly that pertaining to companies’ financial results, while investor concerns retreat after a number of Saudi businessmen, who had been arrest the previous week, were cleared of charges, analysts told Mubasher early Sunday.
By the end of last week’s trades, the Dubai Financial Market (DFM) dropped 4.7% on the back of real estate stocks, while the Abu Dhabi Securities Exchange (ADX) closed in the red on profit-taking.
Strong economy
Iyad Aref, CEO at NamaaZone Research, forecast that UAE bourses will discontinue their declines on the back of news and data regarding the UAE economy’s strength.
Geopolitical events were the main reason behind last week’s decline, he added.
Aref advised investors to make use of the current correction and reestablish positions particularly in blue chips, which have achieved a high financial return in the previous period.
The recent strong declines may be attributed to portfolios liquidating their money in order to take part in the initial public offering (IPO) of Emaar Development, the analyst told Mubasher.
Aref expects the DFM to rebound to between 3,530 and 3,500 points, then resume its declining performance towards 3,330 points, which he describes as “an important buying range.”
Results
Meanwhile, Iyad Al Bareeqy, general manager at Al Ansari Financial Services, noted that companies whose stock prices have fallen significantly will help the DFM rebound this week towards 3,500 points.
Companies which have not announced their results yet will also play a major role in market movement on the two bourses in the coming period, he said.
Among the companies that have yet to disclose their results are: GFH Group, Drake & Scull International, and Union Properties on the DFM, and Aldar Properties on the ADX.
The disclosure period for both the ADX and DFM ends on 15 November.
Geopolitical events
Analyst Mona Mostafa, technical analyst at the African Economic Council, noted that the Saudi Stock Exchange’s (Tadawul) ability to close in the green last week despite the ongoing geopolitical events confirms forecasts that the neighbouring markets, particularly the UAE ones will see a sideways movement until new catalysts emerge.
Translated by: Nada Adel Sobhi
