UAE markets steady as investors wait on MSCI upgrade

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Markets in the United Arab Emirates are likely to be steady on Sunday as bullish first-quarter earnings support this year's equity price gains and investors await MSCI's upgrade to come into effect next month.

The Dubai and Abu Dhabi benchmarks are up 54 and 17 percent respectively this year, but a sustained rally has showed signs of faltering in recent weeks, with Dubai 3.4 percent below May 6's six-year peak and Abu Dhabi 3.7 percent shy of April 23's eight-year high.

Heavyweight stocks including Emaar Properties and Aldar Properties posted above-forecast first-quarter profits to bolster market sentiment.

"Growth in most companies' earnings exceeded expectations," says Mohammed Yasin, managing director of NBAD Securities.

"That usually means fund managers and analysts will review their forecasts for the rest of the year and from that attract more liquidity, but with such a large move we have to be selective. You can't keep buying across the board."

Late Wednesday, index compiler MSCI announced which UAE stocks, as well those in Qatar, would be added to its emerging market index, with June 1 the first day's trading where these changes will be in effect.

The likes of Emaar and Abu Dhabi Commercial Bank were considered certainties to be included, but many investors also made failed bets on smaller companies such as Union Properties and Deyaar making the cut.

These tumbled following Thursday's announcement, with Union Properties and Deyaar falling 3.3 and 4.6 percent respectively, and further selling is likely.

"We're seeing a separation between the long-term value investors and the smaller day-trade investors who have been playing with these shares," says Yasin.

He forecasts the UAE benchmarks will tread water until the MSCI upgrade comes into effect, but expects individual stocks to be volatile within the broader flat trend.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Peter Cooper

Only AB seems to have missed the massive correction in UAE stock markets last week... It would be interesting to have your reports...

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Features & Analysis
Blood on the bourse floor

Blood on the bourse floor

Arabtec’s share price collapse was the catalyst for a huge sell...

Taking stock

Taking stock

Gulf stock markets have seen a dearth of IPOs since the global...

Steering clear of the stock markets

Steering clear of the stock markets

Listing was all the rage three years ago, but IPOs have since...

Most Popular
Most Discussed