Disappointing Arabtec results, oil pull down Dubai index below 4,000

Sunday, Aug 16, 2015

Dubai: Disappointing results from construction major Arabtec along with weak leads from oil, led the Dubai index lower. Saudi’s Tadawul led the losses in the region with more than 2 per cent decline.

The Dubai Financial Market General Index closed 1.38 per cent lower at 3,930.45, after hitting a low of 3,917.88.

“Arabtec’s negative news weighed on the market plus there were a few orders from foreign investors that pulled the market down,” said Mohammad Shabbir, head of equity funds & portfolios at Rasmala Investment Bank.

Arabtec swung to a net loss of Dh718 million in the second quarter to June as against a net profit of Dh102.4 million in the same quarter last year.

Arabtec shares ended 5.38 per cent lower at Dh2.11, while Emaar Properties ended 1.34 per cent lower at Dh7.39. Dubai Islamic Bank closed 1.34 per cent lower at Dh7.39.

Amlak may hit a new low of Dh1.83 by next few weeks, said Osama Al Ashri, member of British organisation, Society of Technical Analysts, adding Arabtec may hit a new low of Dh1.75 by next few weeks.

“I’m still positive on Gulf Finance House, and may hit above Dh1 before end of this year,” said Al Ashri.

Dubai Islamic Bank still needs to breach support level of Dh7.07, and may recover to hit resistance level of Dh7.8.

Out of a total of 32 stocks traded on the exchange, shares of 24 firms fell, while shares of other 5 firms rose.

Negative outlook

Analysts agreed that the outlook for Dubai index is still negative.

“The outlook is negative, and it will remain soft for the next 1-2 months till the US rate outlook is clear,” Shabbir says.

Dubai index is still waiting for a new low and may not breach support level of 3,737, Al Ashri said.

Elsewhere in Abu Dhabi, the general index closed 1.26 per cent lower at 4,670.89.

Abu Dhabi index may fall, but has a strong support at 4,570, Al Ashri said, adding Abu Dhabi Commercial Bank may trade in a stable manner, and breach resistance level of Dh10.

Waha Capital may see a low of Dh2.23 by later on the week, Al Ashri said.

ADCB ended 1.88 per cent lower at Dh8.34, while Waha Capital closed 2.48 per cent lower at Dh2.36. Saudi’s Tadawul index was also lower weighed by weak oil prices last week.

Saudi index may hit a new low of 8,280 by next few weeks, Al Ashri said, adding “I recommend to buy National Industrial at 15.80 Saudi Riyals, and may hit a target of 20 Saudi Riyals by next few months.”

Elsewhere in the Gulf, Qatar Exchange index closed 0.11 per cent lower at 11,844.43, while Muscat Securities MSM 30 index closed 0.42 per cent lower at 6,292.34.

By Siddesh Suresh ?Mayenkar Staff Reporter