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DFM hits 7-year low

By Muzaffar Rizvi DUBAI - Most Gulf markets on Wednesday ended lower as investors remained cautious due to lack of positive catalysts and an uncertain global outlook.

The Dubai Financial Market , or DFM , led the region-wide decline in muted trading activity as the main index hit its lowest close in seven years.

The benchmark index fell 1.83 per cent to 1,335.87 points, its lowest close since June 2004. The trading volumes declined to 73.17 million from 114.02 million shares on Tuesday. Out of 27 stocks traded yesterday, only one closed in positive column against 21 declined and five remain unchanged.

"It seemed a lot like seller capitulation before the yearend as recent buyers who got in anticipating an MSCI upgrade have decided to cut their losses and get out of the market," Shailesh Dash, chief executive of Al Masah Capital Management Limited, told 
Khaleej Times.

Property stocks led the decline as Emaar Properties dropped 3.11 per cent to Dh2.63 per cent and contractor Arabtec declined 3.03 per cent to Dh1.69. Telecoms operator du fell 2.69 per cent to Dh2.98.

"Most of the activity was in Emaar and Arabtec, which makes sense since the contractor has had a recent 15 per cent run-up so investors that have had made money are locking it."

In the banking sector, Emirates NBD and Dubai Islamic Bank ended 1.64 per cent and 1.55 per cent, respectively.

Dash said the market could drift further down, or if we've had a serious seller washout, then fresh money could come in for some bargain hunting; however, the abysmal volume levels do not support any sustained market movement.

In reply to a question, he said a firm resolution to the eurozone crisis may have a global impact, lifting local bourses as well. "Any policy enacting and development that addresses the issue of market liquidity would also be welcome. In the meantime, the market will surely stay in the shadows of Qatar and Saudi Arabia."

ADX extends fall

The Abu Dhabi Stock Exchange's General Index fell 1.26 per cent to 2,343.25 points, its lowest close since March 2009. The volumes dropped to 59.56 million shares amid lack of positive catalysts.

Aldar Properties dropped 3.5 per cent to a new record-low despite clarifying a report that it has no plans to delist from the Abu Dhabi bourse. The property developer has tumbled 11 per cent this week.

Sorouh Real Estate retreated to the lowest levels since their shares were listed on the bourse and closed 2.5 per cent down at 79 fils, the lowest since December 2005.

In the banking sector, First Gulf Bank fell 2.6 per cent and National Bank of Abu Dhabi closed at Dh10.40.

In regional markets, Kuwait's market ended down 0.18 per cent at 5,812.10 points and Bahrain's BB All-Share Index slipped 0.12 per cent to 1,142.87 points. Oman's MSM 30 Index was little changed at 5,633.01 points.

Saudi Arabia's Tadawul All Share Index rose 0.66 per cent to 6,330.01 points. Qatar's QE Index edges up 0.05 per cent to 8784.52 points.

© Khaleej Times 2011