Outlook: UAE stock markets to remain positive, barring virus resurgence

Corporate results starting to improve, says Chimera

  
Investors are seen at the Dubai International Financial Market in Dubai, UAE February 7, 2018. Image used for illustrative purpose.

Investors are seen at the Dubai International Financial Market in Dubai, UAE February 7, 2018. Image used for illustrative purpose.

REUTERS/Satish Kumar

Stock markets in the UAE will continue to perform well, provided there is no resurgence of coronavirus cases, Abu Dhabi-based asset management firm Chimera Capital said in a bourse filing to the Dubai Financial Market (DFM) on Monday. 

Chimera had reported “growing interest” from investors looking to capitalize on the UAE economy’s strong prospects, with its S&P UAE Exchange Traded Fund (ETF) surpassing 100 million dirhams ($27.2 million) in assets under management in July 2021, barely a year since its launch.  

Its UAE UCITS ETF, rolled out only in February this year, also recorded 61.8 million dirhams in AUM as of June 2021. 

The Dubai Financial Market and Abu Dhabi Securities Exchange (ADX) have had positive performance in 2021, buoyed by the rise in sentiments and improving economy.  

So far this year, the ADX rose 35.5 percent, while the DFM was up 12.8 percent. Trading on the ADX averaged 1.2 billion dirhams, exceeding the DFM’s 227 million dirhams. 

“The strong performance of the stock markets up to the end of June is a reflection of investors’ expectations of UAE companies recovering from the pandemic-induced slowdown,” Chimera said. 

Financial results in the banking sector have so far been “encouraging”, while the recovery signs and increasing demand in the UAE real estate market, have helped push up stock prices of listed companies like Emaar Properties, Aldar Properties and Emaar Development

Firms in the telecom sector are also doing well, while other companies like ADNOC Distribution, Dana Gas and Abu Dhabi Islamic Bank had double-digit stock returns, Chimera said. 

“The outlook for the UAE stock markets is positive provided that the rebound in the current economic activity is maintained,” the firm said. 

“Market data suggests that the corporate results are starting to improve and should continue to do so, provided there is no resurgence in the COVID-19 pandemic.” 

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said on Sunday that the worst of the COVID-19 pandemic is over for the UAE. The number of daily coronavirus cases in the country has flatlined to under 1,000, compared to a daily case count of 4,000 early this year.  

(Reporting by Cleofe Maceda; editing by Seban Scaria) 

Cleofe.maceda@refinitiv.com 

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© ZAWYA 2021


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