Thursday 31 July 2014
 
»
 
»
INVESTORS CASH IN EARLY GAINS

Dubai slumps to new low; Gulf stocks mixed

Dubai, June 23, 2013

Dubai's bourse suffered its largest one-day drop in 15 months on Sunday, while other Gulf markets were mixed as a lack of positive catalysts spurred investors to cash in early-year gains. Trading volumes thinned in a typical summer lull.
 
The main Dubai index fell 2.6 per cent to 2,300 points, a four-week low, in its biggest one-day loss since March 2012. The drop triggered a bearish right triangle formed by the highs and lows since early June, and pointing down to near the 2,100-point area.
 
However, traders generally blamed profit-taking after this year's gains of more than 40 percent, rather than any fundamental worsening of Dubai's outlook, and did not think the drop indicated Dubai would become dominated by the bearishness engulfing many other emerging markets.
 
Because of currency pegs and high oil prices, Dubai and other Gulf markets appear well-protected from the U.S. interest rate rises which are hurting other markets.
 
"The market is slowing down - it's the end of the quarter and summer is here," said Mohab Maher, senior manager of the institutional desk at MENA Corp.
 
Trading volume fell to 200 million shares; turnover usually falls after May as traders and investors take holidays to escape the summer heat. The index is still up 42 percent year-to-date.
 
Builder Arabtec lost 5.3 percent. After the close, the company said it was extending the period for its $650 million rights issue, due to end on Sunday, to July 4 to allow investors outside the United Arab Emirates to buy into it.
 
The company said the extension was at the request of shareholders. Earlier, a source familiar with the plan had told Reuters on condition of anonymity that the rights issue period was expected to be extended after the entire amount was not taken up by shareholders.
 
Abu Dhabi's benchmark fell 1.9 percent, its biggest daily drop this year.
 
Analysts expect Gulf markets to be lacklustre in coming weeks, partly because of uncertainty before second-quarter earnings announcements. Saudi Arabia kicks off its earnings season in mid-July, while UAE companies will mostly report from early August onwards.
 
In Saudi Arabia, banks helped lift the bourse after two flat trading sessions; the benchmark climbed 0.5 percent. Banks rose after official data showed lending to the private sector in May rose 16.5 percent, the fastest clip since February 2009, after a 16.0 percent increase in the previous month.
 
Firass Yaish, business development manager at One Financial Market, said the lending growth figures had provided only a short-term stimulus.
 
"Even though there was a pick-up in lending, the picture will only be brighter for the banks when the interest rates are raised, enhancing the banks' profit margins and potential growth," he said.
 
Shares in Riyad Bank rose 1.4 percent. The firm said it would distribute first-half dividends of 975 million riyals ($260 million) or 0.65 riyals a share.
 
Petrochemical shares also gained with the sector's measure adding 0.5 percent.
 
Elsewhere, Cairo's index dropped 2.2 percent to a one-year low. Trading remained thin as political unrest and the weak economic outlook weighed on risk appetite; local investors were net sellers, but Arab and non-Arab foreign investors were net buyers by large margins, exchange data showed.
 
The Muslim Brotherhood staged a show of strength in Cairo on Friday, rallying a huge crowd to demonstrate support for President Mohamed Mursi - and warn opponents who hope to force him out. 
 
Mursi's opponents say they have gathered about 15 million signatures - more than the 13 million votes that elected the president a year ago - for a petition calling on him to step down.-Reuters



Tags: Dubai | bourse |

More Finance & Capital Market Stories

calendarCalendar of Events

Ads

Buy high quality China wholesale Health & Beauty , Electronics, Sports & Outdoors , Computers, Video Games, Toys & Hobbies Cell Phones, Automobiles and other wholesale products directly from reliable Chinese wholesalers or Factories on DHgate.com