The Abu Dhabi Securities Exchange (ADX) ended almost flat yesterday amid mixed trends in banking, real estate and energy stocks. The ADX index lost 2.28 points, or 0.09 per cent, to close at 2551.16 points.
The market opened in the negative territory and remained in the downside throughout the session amid very low turnover and limited movements. There were low transactions and the stocks moved in a very narrow range, which did not attract investors or speculators to take positions.
Turnover remained very low, with 46 million shares worth Dh59.2 million changing hands during the session. Real estate and energy stocks remained the top players in the market despite all of them closing in the negative area - but with very low losses. Only Aabar Investments, which suffered high downside pressure, lost more than seven per cent.
Real estate stocks suffered minor losses with Aldar retreating 0.64 per cent to Dh3.06 and Sorouh falling 0.52 per cent to Dh1.92. Dana Gas shed 1.4 per cent to Dh0.69 and Taqa slid 0.9 per cent to Dh1.10.
Heavyweight etisalat witnessed relatively good transaction and closed flat at Dh10.40. Heavyweights in the banking sector witnessed limited movements. FGB rose 0.66 per cent to Dh15.20 while NBAD ended flat at Dh10.85. Finance House was among the top losers in the market yesterday, slipping 9.7 per cent to Dh4.49.
"There is a deep lack of liquidity in the market. There are no strong transactions attracting investors to inject more cash into stocks. This situation is projected to continue in the short term," said Fadi Al Said, Head of MENA Equities at ING Investments.
Aabar faces selling pressure
Aabar Investments witnessed strong selling pressure yesterday and the stock lost 7.06 per cent to close at Dh1.56.
The company announced that its board of directors had agreed to convene an extraordinary general assembly meeting to discuss the conversion of the company to a private joint stock company. The meeting will be held on July 26, Aabar said in a statement on the ADX.
"The board of Aabar considers this step as essential in the life of the company to provide Aabar with greater operational flexibility required to ensure the ongoing success of the company's investment strategy and its ability to effect opportunistic acquisitions both in the UAE and abroad," Aabar added.
However, the announcement was disappointing for speculators who bought the stock heavily last week on rumours that the company will buy back shares from minority shareholders at a premium before delisting from the ADX.
"Shares of private joint stock companies are traded outside the market and dealings in shares are registered with the company's registrar, which is the National Bank of Abu Dhabi," Aabar said.
"This means that investors will revert to Over The Counter (OTC) trading. This may affect the market value of Aabar's shares and minority shareholders are afraid of losses, so we saw strong selling pressure yesterday," said Wadha Al Taha, a senior market analyst. "OTC trading is used for companies before listing in a stock market. This is an exceptional situation as Aabar is moving out of the market and shifting from normal trading to OTC trading."
By Mohamad Al Kady
© Emirates Business 24/7 2010
