UAE markets close flat as investors await buybacks

28 May 2006

Abu Dhabi: UAE markets closed flat yesterday as the indices rose fractionally as investors continued to show scant interest, awaiting decisions on share buybacks by companies.

Brokers and analysts said institutional investors have begun buying while volumes are getting shallow and the trading range getting narrower, both good signs for the market.

The Dubai Financial Market index gained 3.22 points to close at 476.51 points, up 0.68 per cent over Thursday's close. Turnover was below average at Dh931.24 million with some 99.79 million shares changing hands in trades totalling 6,027.

There were a dozen gainers, double the number of losers with Emaar accounting for more than half the total turnover. The Abu Dhabi market index ended 3424.71 points, up 0.19 per cent but turnover was a modest Dh104.59 million in volumes of 21.18 million and just about 1,318 deals. Losers outnumbered gainers 14:13.

"Investors are waiting for some decisions relating to share buybacks which will help put positive sentiments," said Nabeel Farahat, Chief Executive, Al Fajr Securities. "Prices are currently at attractive levels especially for institutional investors and there's new liquidity coming from them especially into Abu Dhabi."

An Abu Dhabi-based fund manager confirmed there was institutional buying yesterday.

"For the first time in two years investors have started basing their decisions on company fundamentals and some long-term investors have started taking positions in Abu Dhabi-based banks such as Abu Dhabi Commercial Bank, First Gulf Bank and Abu Dhabi Islamic Bank," he said, adding that for once there was less of speculative buying.

Trading range

Emaar's price was stable yesterday at Dh12.35 although there were significant offers at Dh12.25 and Dh12.50.

A broker said some strategic investors bought some 15 million shares of Emaar. He said the drop in turnover at DFM is a good sign as the market is getting into a thinner range of trading and volumes getting lesser. "In other words, volumes are getting shallow and the trading range is getting narrow which is good sign for the market."

Four new companies have secured approval for listing on the UAE stock markets, a statement from the Securities and Commodities Authority said yesterday.

The four new companies are United Kaipara Dairies Company and Arab Orient Insurance Company under category 1 and Dubai Development Co and Gulfa Mineral Water under category II.

"Currently there are 103 companies listed in the financial markets including 15 foreign companies," the statement said.

The new listings have been approved by the Ministry of Economy and Planning.