Tuesday, Aug 22, 2017

Dubai

Stocks like Gulf Finance House (GFH), Shuaa Capital, Eshraq Properties, and Dana Gas, once darling of traders, have lost its sheen as trading value has tumbled along with the stock price.

Since January 2016, these stocks were very active on the Dubai and Abu Dhabi bourse, which triggered a spike up in value by 60-70 per cent over and above the normal average. Shares prices have more than doubled since last year.

But now the trades have fizzled in those small stocks, with many traders were still stuck with the positions as the shares have been witnessing sideways movement, without a major decline, triggering hopes of a rebound.

“People are still holding these shares on hopes of a rebound, like the way it did in the recent past. I’m not sure if we will see a similar recovery at least in coming months,” said an analyst with a brokerage, who did not wished to be named.

Shuaa zoomed from 30 fils in January 2016 to Dh2.02 now, while GFH rose from 32 fils in January 2016 to Dh1.8.

GFH hit a high of Dh2.82 in March 14, after gaining 705 per cent since September 2015. The recent high was at Dh2.31 and the stock has gradually moved sideways and then moved slightly lower.

Mixture

Going ahead, it will be a mixture of small stocks and bluechips that will rule the markets. “It’s going to be mixed of both, with the restructuring stocks like DSI, Arabtec, and other construction companies that would translate into positive outlook,” said Marwan Shurrab, head of high net worth and retail equity brokerage, Al Ramz.

Arabtec and Drake and Scull have witnessed recovery after the company undertook restructuring plans.

“We have seen a run of the stocks since the beginning of the year. If market holds these levels, and turnover come back. We still need strong performance in the market,” said Shurrab.

The Dubai Financial Market general index has been one of the top performers in the region, and has registered 9 per cent gains so far in the year.

Union Properties

Opinion among fund managers and traders is mixed with regards to UPP.

The company surprised the street with loss in the second quarter, which emanated from financial misrepresentation of the past years.

“I have an eye on UPP and will likely enter to buy the stock as it finds a bottom,” a prominent fund manager said.

“It’s a no-brainer, because the newish-board and fresh new faces in top management will have used the first opportunity to flush everything unsavoury out of the system and start from a clean slate — this explain the large hit in last quarter results, hence the likelihood of any more bad news of this nature is limited,” the fund manager said.

The fund manager expects more good than bad news on UPP going ahead.

“I’m going to be looking to buy the stock as it establishes a true bottom,” he added.

By Siddesh Suresh Mayenkar Senior Reporter

Gulf News 2017. All rights reserved.