Last week saw dismal volumes and little buying on regional markets and there are few signs that the week ahead will be much more vibrant. "We have a vacuum of news," said Mohammed Ali Yasin, the chief executive of Shuaa Securities. "People are not looking at fundamentals or valuations of companies. Retail investors are looking at oil prices and international markets ? and because that doesn't rely on local fundamentals there's no steam."
The Dubai Financial Market General Index lost 0.04 per cent for the week, falling to 1,514.23. The Abu Dhabi Securities Exchange General Index lost 0.7 per cent to 2,519.92. Volumes were the lowest in months. Now, some analysts are hoping for markets to drop further so they will attract trading from bargain-hunters. "The market is in anticipation mode, everyone is waiting for markets to break current support levels," said Mr Yasin. "For the [Dubai Financial Market General Index] it's 1,500, and for Abu Dhabi's index it's 2,500. Once it breaks those levels from a technical point of view ? that's where everyone is expecting a rebound and higher volumes."
The Abu Dhabi Islamic Bank Index, which tracks Sharia-compliant companies in the UAE, fell 2 per cent last week. Foreign investors will be looking for more substantive improvements this week. "Real estate and banks together form the biggest chunk of the UAE market," said Ali Khan, the managing director of Arqaam Capital in Dubai. "With these two sectors facing their respective headwinds, it's difficult to attract international liquidity in the market."
Abu Dhabi Commercial Bank fell 2.5 per cent last week to Dh1.53, losing the most among Abu Dhabi-based banks. Sorouh Real Estate dropped 0.6 per cent to Dh3.06, the most against other developers in the sector. "Liquidity is looking for earnings growth right now," Mr Khan said. In Kuwait, Agility is expected to give out its cash dividend of 40 Kuwaiti fils a share today. Shares remained unchanged at 454.97 Kuwaiti dinars for the week. Kuwait's measure lost 1.2 per cent to 6,639.80 for the week.
Analysts say global themes, such as the price of oil and volatility in commodities and currencies, will continue to affect the Gulf region. Nymex oil futures closed just under US$74 a barrel on Friday. "As oil continues to be range-bound between $70 and $75 it's hard to find positive catalysts for the petchems sector, one can highlight major global themes that are presenting significant headwinds for us," Mr Khan said.
Saudi investors reacted yesterday to news from late last week that Saudi Electricity will sign a financing agreement with foreign banks worth up to $1.47 billion to build a plant. Saudi Electricity shares moved up 1.5 per cent to 13.2 riyals per share. The Saudi Tadawul All-Share Index rose by 2.7 per cent. Elsewhere in the region last week, Bahrain's main measure dropped 1 per cent to 1,401.12. Muscat's MSM30 Index lost 0.2 per cent to 6,122.01. Kuwait's bourse fell 1.2 per cent to 6,639.80, and Qatar's QE Index rose 1.1 per cent to 6,853.63.
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