Attractive buying opportunities prop-up in UAE stocks after rout

Tuesday, Aug 25, 2015

Dubai: UAE stock markets have thrown some buying opportunities, with Dubai index losing nearly a fifth of its value from its 2015 high.

On Tuesday, the Dubai Financial Market General index closed 4.61 per cent, with Emaar, Arabtec and Amlak Finance jumping by more than a minimum of 5 per cent.

“It is difficult to determine when and where the market will find a floor, but Saudi and UAE are beginning to show very good value opportunities emerge. We would recommend buying into these markets but would caution focusing on quality blue-chip names and entering the market gradually, as the risk of further volatility and weakness remains,” said Fahd Iqbal, Head of Middle East Research private banking, Credit Suisse.

Emaar Properties closed 3.43 per cent higher at Dh6.33, while Arabtec closed 9.94 per cent higher at Dh1.99. Amlak Finance closed nearly 15 per cent higher at Dh2.03.

Out of a total of 33 stocks traded on the exchange, shares of 25 firms rose, while shares of another 5 companies fell.

“Defensive sectors such as telcos, retail, and food & beverage that were indiscriminately sold off alongside the rest of the markets are attractive along with logistic companies,” said Nadi Bargouti, managing director at Emirates Investment Bank told Gulf News.

“Many of these companies continue to have attractive growth profiles through the capacity expansions that they are undertaking and due to their strong balance sheets that can allow for such expansions, notwithstanding the challenging overall economic environment,” Bargouti said.

Uncertainty

“Uncertainty is investors’ worst enemy. Several concerns weigh on regional investors’ minds: China consistently showing signs of weaknesses in their manufacturing and export sectors, Greece continuing to weigh down on any possible economic progress in Europe, and a resilient oil supply glut combined with weak demand adding pressure to already out of favour commodity prices,” Bargouti said.

Markets have been impacted by plenty of factors including expectations of a slowdown in Chinese economy, along with a potential Federve Reserve rate hike.

In Abu Dhabi, the general index closed 1.63 per cent higher at 4,334.17. In stock specific movements, Aldar Properties closed 7.04 per cent higher at Dh2.28, while Abu Dhabi Commercial Bank closed 12.29 per cent higher at Dh7.49.

Eshraq Properties closed 12.07 per cent higher at Dh0.65.

Out of a total of 28 stocks traded on the exchange, shares of 23 firms rise, while shares of other 3 declined.

Elsewhere in the Gulf, Saudi’s Tadawul index closed 7.38 per cent higher at 7,543.05, while Muscat Securities MSM 30 index closed 0.42 per cent higher at 5,760.29.

By Siddesh Suresh ?Mayenkar Staff Reporter

Gulf News 2015. All rights reserved.