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Thu 18 Mar 2010 10:21 AM

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Dubai resumes rally; Abu Dhabi down again

UPDATE 4: Dubai's DFM ends higher for a ninth session in eleven.

Dubai resumes rally; Abu Dhabi down again
STOCK WATCH: The index DFM rose 0.8 percent to 1,732 points. (Getty Images)

Dubai's index DFM ended higher for a ninth session in eleven, as some investors took advantage of lower prices to build new positions following Wednesday's fall.

The benchmark lost 2.3 percent the previous day in its largest decline for more than a month, but most stocks rebounded on Thursday.

Dubai Financial Market climbed 1.8 percent and Union Properties added 2 percent.

"I believe that the UAE markets are still in "catch-up" mode to the rest of the regional markets," says Mohammed Yasin, Shuaa Securities chief executive.

With many stocks trading at a price-to-earnings ratio of below nine, investors have an excellent investment opportunity, Yasin says.

"The formal announcement of the Dubai World restructuring plan, if it comes in line with what was said, will remove a big worry that has shadowed the UAE markets since November 2009, and will allow the normal fundamentals of the UAE listed companies to decide the movement of the market in the next few weeks," Yasin adds.

The index rose 0.5 percent to 1,726 points.

Abu Dhabi's index ADI fell for a fourth day, slipping 0.6 percent to 2,832 points as banks slid.

First Gulf Bank fell 3.1 percent and Abu Dhabi Commercial Bank dropped 4.8 percent.

Abu Dhabi National Energy Co (Taqa) rose 1.6 percent after it said it plans to spend $1.4 billion on five capital projects this year.

Agility slumped to a five-week low as investors continued selling Kuwait stocks.

Agility fell 1.7 percent, having dropped to its lowest level since Feb. 8 in earlier trading. The stock was down 45 percent since a US court indicted it on fraud charges in November.

Zain slipped 1.5 percent and Kuwait Finance House lost 1.8 percent.

The index KWSE fell 0.7 percent to 7,362 points, taking its losses to 1.8 percent since hitting a 20-week high on Monday.

"We could see a minor dip to 7,300 points," NBK Capital wrote in a research note. "Next resistance is at 7,600 - 7,700 points."

Qatar National Bank declined as investors booked profits from an early-session 20-week index high.

QNB fell 1.4 percent, having risen 2 percent to a 29-week high at the open. Lenders' stocks had surged the day before after the central bank said banks could soon trade stocks again.

This will enable banks to diversify their revenue base and bolster trading income as the government relaxes curbs on buying listed securities and allows banks back into brokerage operations, analysts said.

Masraf Al Rayan fell 1.5 percent and Commercial Bank of Qatar 1.6 percent.

The index fell 0.6 percent to 7,271 points, having hit its highest level since October 27 in initial trade.

"The market was looking for an excuse to rally and (the central bank decision) provided it," said Hashem Montasser, EFG-Hermes managing director and head of regional asset management.

"If it brings regional and international investor interest into the market, volumes will rise."(Reuters)