Late buying boosts Dubai index

Zawaya, August 4 – Last-minute buying in a few key stocks helped the Dubai Financial Market (DFM) close higher, but still below the psychological 400point mark yesterday. In Abu Dhabi, selling pressure in shares of building materials company Bildco amid uncertainty about the firm’s buyback plans pushed the market below breakeven.

Trading volumes slumped once again, with turnover falling 41 per cent over the prior session to Dh104.25 million on the DFM, and the number of shares traded went down by nearly half to 16.4 million. Liquidity also sapped in Abu Dhabi ahead of the weekend, with only 12.7 mil lion shares worth Dh46.7m traded on the Abu Dhabi Securities Market (ADSM).

"Market trading is so slow, so quiet, and the volumes are low," said Shawkut Raslan, the head trader at Prime Securities. He said the volumes are the lowest they have been in a year and attributed the slump to annual summer doldrums. "This is the period of the year that is so quiet because most of the investors are on vacation." The DFM opened at 396.42 points and fell to 395.18 before closing at 398.24. It was a rise of 0.42 per cent over the prior session.

Emaar Properties was the most heavily traded stock of the day, accounting for more than half of the day’s turnover and a third of the day’s traded shares.

The property heavyweight closed up 0.46 per cent to Dh10.8. Other traded stocks were mortgage financers Amlak and Tamweel, the former closing at breakeven at Dh5.89, and the latter rising one per cent to Dh2.95. Shuaa Capital’s share price fell 1.45 per cent to Dh4.05, just above its 52-week low of Dh4.02.

The investment bank this week recorded a 98 per cent decline in second quarter profits over last year.

In Abu Dhabi, the market driver for the second day was Bildco. Some 3.8 million Bildco shares changed hands, pushing its price down four per cent to Dh3.84 – effectively losing its prior day gains.

Raslan said that investors were enthused by news that the firm would buy back up to five per cent of its shares, but booked profits due to uncertainty about when the buyback would occur.

"Investors are looking for a timeline of when the buyback will happen," he said. The ADSM fell as low as 3,398.67 before closing 0.23 per cent lower than the prior session at 3,427.52 points.

Trading in just four companies – Bildco, Dana Gas, Rak Properties and Aabar Petroleum – accounted for 75 per cent of the day’s volumes.

"I think the market will return to normal volume by the middle of September," he said, downplaying the impact of the geopolitical situation on the market.

A Dubai-based fund manager disagreed, saying the geopolitical situation is still weighing heavily on investor sentiment and prompting many to stay on the sidelines.