Stock markets in the United Arab Emirates may face more selling pressure on Sunday after investors started booking profits at the end of last week following strong rallies.
Stock indexes in Dubai and Abu Dhabi fell 1.1 and 1.6 percent respectively on Thursday after both hit their 2015 highs a day earlier. Dubai had risen 30 percent from its March trough to last week’s peak while Abu Dhabi had climbed 11 percent from its 2015 bottom, also hit last month.
Some stocks’ rebound was even more spectacular. Dubai’s Union Properties, for instance, had surged 74 percent from its March low by Wednesday; the stock fell 2 percent on Thursday.
The board of bourse operator Dubai Financial Market will discuss its first-quarter results at a meeting later on Sunday, after the market closes. It may post a profit decline as the value of securities traded on the bourse during the quarter shrank by about two-thirds year-on-year, according to exchange data.
However, positive news may support some companies such as DAMAC, which said on Sunday it had a development site on Al Reem island in Abu Dhabi and the project there, which was awaiting approvals, would have a sales value of about 1 billion dirhams ($272 million). It provided no details.
Another Dubai firm, retail start-up Marka, said on Sunday its acquisition of a 60 percent stake in children’s entertainment centre network Cheeky Monkeys had cost about 30 million dirhams and would boost its revenues by 17.3 million dirhams this year, 35.5 million next year and 46.1 million in 2017.
In the wider Gulf region, markets may be supported by strong oil after Brent hit a 4-1/2-month high of $65.80 a barrel on Friday. Global equities also rallied on that day and NASDAQ hit an all-time high.
However Saudi Arabia’s index, which last closed at 9,615 points, still faces major technical resistance in the 9,572-9,745 point area, where the 200-day average roughly coincides with the March peak.
In Egypt, the central bank’s decision to keep its benchmark interest rate unchanged late on Thursday was no surprise to the market: all five economists surveyed by Reuters had forecast such an outcome.
The Cairo index began recovering late last week after a bout of weakness which some market players attributed to new tax rules regarding capital gains and dividends. Most Egyptian companies have yet to post first-quarter results.
Source: Reuters
