Slow buying interest supported a bounce in the Abu Dhabi Securities Exchange (ADX) for the second successive session yesterday and helped it close 4.94 points up at 2800.32 points, a gain of 0.18 per cent.
The ADX index moved in the same direction as the DFM, with the market seeing good gains during intraday trading before a small dive at the end of the session.
However, there were indicators in the market for further gains as buying interest was seen in heavyweights, especially etisalat, which was the top active player despite closing flat at Dh10.75.
"The ADX index, which was moving sideways or slightly down for the past two weeks and was on the neckline support level of 2770 points, yesterday met some buying and gave a bullish close. We can expect a further bounce from the supports but a close below 2770 can bring selling until the lower supports of 2700 points," said Shiv Prakash, Equity Investment Analyst at MAC Capital Advisors.
"However, we noticed signs that the market has reached its oversold territory. This could lead to a bullish breakout in the near term. Today, the ADX index may stay above the pivot levels of 2800 points and can touch the 2815 resistance levels. If it breaks below the pivot it can fall until the 2785 supports," Prakash said.
Fadi Al Said, Head of Mena Equities at ING Investment, said the recent movements in the ADX were indicative of a short-term bottom in the market and the ADX might bounce up soon.
"There is a focus on banking and telecom stocks, which is a sign that long-term investors and institutions are buying. This type of accumulation is indicative of a good bounce in the market," he said.
Real estate stocks continued their recovery yesterday with Aldar rising 0.77 per cent to Dh3.88, while Sorouh advanced 0.86 per cent to Dh2.30.
Banking stocks continued to show mixed movements despite increasing trade volumes in these stocks. Heavyweights NBAD and FGB retreated slightly to close at Dh11.95 and Dh18.25 respectively. ADCB continued its uptrend and added 1.6 per cent to Dh1.88, while Rakbank was the top gainer in the banking sector, adding 5.26 per cent to end at Dh4.00. The energy sector was the only loser in the ADX yesterday, as Dana retreated 1.22 per cent to Dh0.81 and Taqa fell 0.88 per cent to Dh1.12 while Aabar advanced 0.88 per cent to Dh2.27.
Aabar rises 0.88%
Aabar Investments was the only gainer among energy stock yesterday and added 0.88 per cent to close at Dh2.27. The company said its board of directors will meet tomorrow to consider the issuance of mandatory convertible bonds and determine the date of issuance and the terms and conditions of the bonds.
The move came after the company's extraordinary meeting last month approved a plan to issue convertible bonds worth up to Dh7.35 billion to the International Petroleum Investment Company. The conversion of the bonds will take place at a price not more than Dh2.50 per share
By Mohamad Al Kady
© Emirates Business 24/7 2010
