13 May 2009
The Dubai Financial Market (DFM) yesterday registered a gain of 1.18 per cent on the back of accumulation deals and buying activity in select stocks.
The DFM general index gained 19.50 points to finish the day at 1671.77 points against the previous close of 1652.27 points. Speculators and retail investors preferred to take positions in stocks that were available at attractive prices.
Speaking to Emirates Business, Amjad Bakir, Trading Manager at MAC Sharaf Securities, said: "The market didn't slip into the red because local institutions were accumulating their positions. The DFM index today closed near 1680, which is a resistance level. And if it breaks this level, the index will rally to 1700 and further to 1757 points. I expect the index to touch 1800 points and to see profit taking at that level."
Contrary to expectations that realty stocks would take a hit following news about the Dubai Government asking real estate companies to get approval for cancellation of projects in the emirate, the realty stocks in the DFM actually closed higher.
The realty index, which rose 2.86 per cent to 2802.41, recorded the second highest gain among all indices on the bourse, while the utilities index recorded the highest gain of all at 8.11 per cent and closed at 1442.31 points.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "The move higher we saw today was expected after yesterday's profit taking and the completion of residual sell orders early today. The sideways volatile channel that we are trading in currently looks set to be with us throughout the second quarter as we look for evidence that the economy is showing initial signs of recovery. A 'U' shaped trend out of the current downturn is the best case scenario as the alternative is a prolonged 'L' shape."
Reflecting the weak buying support, the DFM general index opened lower at 1636.71 points and immediately slipped to 1632.92 points - the day's low. Later, the index picked up on accumulation deals to reach 1655 points and slipped to 1640 points during the noon session as it came under pressure. The second half of the session saw gradual upward movement of the index.
Shiv Prakash, Technical Analyst at MAC Capital, said: "Markets took lower channel supports in the hourly charts and showed good bounce. Sentiments were also strong based on the surge seen in global futures. Stocks opened down but buying from lower supports enabled the market to close higher by 1.18 per cent at 1671.77, which indicates that the bullish rally still remains intact after mild profit-taking."
Key factors, such as a mixed trend in Asian stock markets and weak sentiment in the US markets, have impacted the trading pattern.
"Earnings have not been as bad as many feared, and, in the current environment, that's good. The DFM looks set for a third retest of the 1690 resistance since we fell back through it on April 20," added Wakeman.
After rising for a couple of sessions, taking cues from global markets, the DFM has reached a correction stage. Market observers are keenly tracking foreign investors' movements. Of late, regional markets have been receiving foreign investments in a limited range. With the global markets turning weak, all eyes are on foreign investors for their future moves.
"Most investors who booked profits on Monday were back to the market to take up positions in low-priced stocks. Market players used some sloppy US futures and drifty Asian markets as an excuse to take a breather and book profits. There is nothing sinister in yesterday's move and it was a healthy step back after recent strength. Slight fluctuations in crude oil prices and the IMF's growth projections didn't have much impact, and it was purely retail investors taking cash off and infusing it in at regular intervals.Selling pressure was measured and free of panic, nothing to be alarmed about, and I would expect a rebound in coming days," said Wakeman.
Arabtec clocks highest turnover
In a resurgent move, Arabtec recorded the highest trading turnover of Dh212 million yesterday, accounting for 45.88 per cent of total trading on the DFM.
The other major volume pushers on the DFM included Emaar (Dh71m), Tabreed (Dh65m), DFM (Dh48m) and DSI (Dh47m).
"Arabtec was up again to close higher by 5.73 per cent at Dh2.58, which can target Dh2.70 in the near-term. Emaar was up by 1.93 per cent to close at Dh2.63. A close above 2.65 will be considered bullish," said Shiv Prakash of MAC Capital.
The trading turnover was Dh593m as 462 million shares were traded in 7,559 transactions on the DFM. Reflecting the undercurrent of positive sentiment, 22 stocks advanced and only three scrips declined on the bourse. Of the 26 traded stocks, only one remained unchanged in its price.
Meanwhile, the DFM has suspended trading in the Global scrip following the non-disclosure of financial results at its board meeting on Monday. Trading in National Cement (NCC) and Mazaya resumed yesterday as the companies disclosed their results in board meetings held on Monday, while trading has resumed in Unikai shares.
The Dubai Financial Market (DFM) yesterday registered a gain of 1.18 per cent on the back of accumulation deals and buying activity in select stocks.
The DFM general index gained 19.50 points to finish the day at 1671.77 points against the previous close of 1652.27 points. Speculators and retail investors preferred to take positions in stocks that were available at attractive prices.
Speaking to Emirates Business, Amjad Bakir, Trading Manager at MAC Sharaf Securities, said: "The market didn't slip into the red because local institutions were accumulating their positions. The DFM index today closed near 1680, which is a resistance level. And if it breaks this level, the index will rally to 1700 and further to 1757 points. I expect the index to touch 1800 points and to see profit taking at that level."
Contrary to expectations that realty stocks would take a hit following news about the Dubai Government asking real estate companies to get approval for cancellation of projects in the emirate, the realty stocks in the DFM actually closed higher.
The realty index, which rose 2.86 per cent to 2802.41, recorded the second highest gain among all indices on the bourse, while the utilities index recorded the highest gain of all at 8.11 per cent and closed at 1442.31 points.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "The move higher we saw today was expected after yesterday's profit taking and the completion of residual sell orders early today. The sideways volatile channel that we are trading in currently looks set to be with us throughout the second quarter as we look for evidence that the economy is showing initial signs of recovery. A 'U' shaped trend out of the current downturn is the best case scenario as the alternative is a prolonged 'L' shape."
Reflecting the weak buying support, the DFM general index opened lower at 1636.71 points and immediately slipped to 1632.92 points - the day's low. Later, the index picked up on accumulation deals to reach 1655 points and slipped to 1640 points during the noon session as it came under pressure. The second half of the session saw gradual upward movement of the index.
Shiv Prakash, Technical Analyst at MAC Capital, said: "Markets took lower channel supports in the hourly charts and showed good bounce. Sentiments were also strong based on the surge seen in global futures. Stocks opened down but buying from lower supports enabled the market to close higher by 1.18 per cent at 1671.77, which indicates that the bullish rally still remains intact after mild profit-taking."
Key factors, such as a mixed trend in Asian stock markets and weak sentiment in the US markets, have impacted the trading pattern.
"Earnings have not been as bad as many feared, and, in the current environment, that's good. The DFM looks set for a third retest of the 1690 resistance since we fell back through it on April 20," added Wakeman.
After rising for a couple of sessions, taking cues from global markets, the DFM has reached a correction stage. Market observers are keenly tracking foreign investors' movements. Of late, regional markets have been receiving foreign investments in a limited range. With the global markets turning weak, all eyes are on foreign investors for their future moves.
"Most investors who booked profits on Monday were back to the market to take up positions in low-priced stocks. Market players used some sloppy US futures and drifty Asian markets as an excuse to take a breather and book profits. There is nothing sinister in yesterday's move and it was a healthy step back after recent strength. Slight fluctuations in crude oil prices and the IMF's growth projections didn't have much impact, and it was purely retail investors taking cash off and infusing it in at regular intervals.Selling pressure was measured and free of panic, nothing to be alarmed about, and I would expect a rebound in coming days," said Wakeman.
Arabtec clocks highest turnover
In a resurgent move, Arabtec recorded the highest trading turnover of Dh212 million yesterday, accounting for 45.88 per cent of total trading on the DFM.
The other major volume pushers on the DFM included Emaar (Dh71m), Tabreed (Dh65m), DFM (Dh48m) and DSI (Dh47m).
"Arabtec was up again to close higher by 5.73 per cent at Dh2.58, which can target Dh2.70 in the near-term. Emaar was up by 1.93 per cent to close at Dh2.63. A close above 2.65 will be considered bullish," said Shiv Prakash of MAC Capital.
The trading turnover was Dh593m as 462 million shares were traded in 7,559 transactions on the DFM. Reflecting the undercurrent of positive sentiment, 22 stocks advanced and only three scrips declined on the bourse. Of the 26 traded stocks, only one remained unchanged in its price.
Meanwhile, the DFM has suspended trading in the Global scrip following the non-disclosure of financial results at its board meeting on Monday. Trading in National Cement (NCC) and Mazaya resumed yesterday as the companies disclosed their results in board meetings held on Monday, while trading has resumed in Unikai shares.
By Sreenivasa Rao Dasari
© Emirates Business 24/7 2009
