Real-estate developer fell as much as 4.7 percent Tuesday, snapping seven days of gains
The retail-investor driven rally that’s made Damac Properties Dubai the emirate’s best-performing stock this year may be over for now, at least one technical indicator suggests.
The real estate developer fell as much as 4.7 percent Tuesday, snapping seven days of gains that contributed to a climb of 75 percent since Jan. 1. A surge of buying from individual investors betting on generous dividend payouts boosted the company’s market value by a third in little more than the past week. Since July 10, Damac’s 14-day relative strength index has exceeded 70, a technical signal that a stock may have risen too rapidly and be poised to fall.
“While the shift in strategy toward a more sustainable business model is seen as positive on the long term, the rally did happen really fast,” said Issam Kassabieh, equities research analyst at Mena Corp. Financial Services in Dubai. “We should see a correction going forward amid high volatility.”
While the stock may pull back following its recent rally, Damac is unlikely to revisit the levels around 2 dirhams a share, last seen in May, said Sanyalak Manibhandu, head of research at NBAD Securities in Abu Dhabi. The stock continues to trade at attractive level compared with Emaar Properties PJSC, and investors looking to build positions should buy at about 4 dirhams, he said.
Damac was 4.3 percent lower at 4.24 dirhams by 11:26 a.m. in Dubai, the biggest decliner in the city’s benchmark index. Emaar was 0.5 percent higher.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.