Wednesday, Jul 01, 2015

Abu Dhabi: Equity markets in the UAE traded sideways on Wednesday after Iran and the US agreed to extend their talks over Tehran’s nuclear plans past the original June 30 deadline to July 7.

The Dubai Financial Market (DFM) index crawled up 0.13 per cent to reach 4,092.3, while the Abu Dhabi Securities Exchange (ADX) general index slid 0.55 per cent to reach 4,697.11.

In Dubai, Amlak continued to dominate trade, accounting for Dh603.5 million (63 per cent) of the total Dh958.1 million traded in the market. Share prices, however, only went up 0.36 per cent to reach Dh2.79. The new price’s significance lies in that it is a resistance level that can take shares to Dh3.17, Analyst Osama Al Ashri had earlier told Gulf News.

Other analysts continued to stress that Amlak’s trade is calculated by brokers who are deliberately trying to bring share prices up, and is not based on investors looking at the company’s fundamentals.

Sebastien Henin, head of asset management at The National Investor, attributed the large trade value to speculations. “The current price is very far from the actual valuations. A lot of brokers have done preliminary work to assess the company, and the valuation was a fraction of the current market price. Amlak is by far overvalued at this price. At some point, the rationale will have to come back into the equation, and then people will realise that the price is completely unrealistic, and it will fall back,” he said.

Meanwhile, Arabtec went up 0.38 per cent, Amanat gained 3.33 per cent, Dubai Ports World ended 1.73 higher, and Union Properties remained flat.

Emaar, however, fell 0.76 per cent just one day after announcing that Emaar Misr, the company’s unit in Egypt, is expected to start trading in Cairo’s stock market.

Discussing the outlook for the market, Henin said that it will depend on geopolitical factors rather than companies’ financial results for the second quarter of the year. Elements like oil price fluctuations and whether a deal is signed between Iran and the US could determine market performance in the coming weeks, Henin said.

“I’m not expecting a lot of price movements following the second quarter results. The big question mark was after the first-quarter results — not now — because people then were hesitant to invest because they didn’t know what might be the impact falling oil prices that we saw in Q4 2014,” he said.

In the capital, Abu Dhabi Ship Building Co. topped the gainers’ list with a 15 per cent increase in share prices, followed by International Fish Farming Holding Co. (Asmak) with 9.59 per cent, Dana Gas with 6.52 per cent, and Abu Dhabi National Energy Company (Taqa) with 5.71 per cent.

Of the 34 stocks traded on DFM, 18 went up, nine went down, and seven remained unchanged. Of the 36 stocks traded on ADX, 18 advanced, 13 declined, and five remained flat.

By Sarah Diaa Staff Reporter

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