By Muzaffar Rizvi www.khaleejtimes.com
DUBAI – The UAE bourses are likely to trade in sluggish mood this week, as investors’ appetite remains weak amid the uncertainty over global growth outlook.
Analysts said markets would remain range-bound in thin trade as major investors are wary of entering the market at new positions ahead of Eid Al Fitr. They were of the view that day-traders will continue to rule the markets until the key players give up their cautious approach towards equities.
Last week, Morgan Stanley slashed its global growth forecast for 2011 and 2012, expressing concerns on the US and eurozone and said they are “dangerously close to a recession.”
The bank predicated global GDP at 3.9 per cent for 2011 compared to 4.2 per cent it announced. It also cut 2012 growth from 4.5 per cent to 3.8 per cent.
“Regional markets are completely hostage to global scenarios. Developments in European and American markets are the current market triggers. The reality is that for the time being, global economics take centre stage regardless of how much Saudi and Qatar are spending internally and whether Dubai can act as a safe haven,” Shailesh Dash, chief executive of Al Masah Capital Management, told Khaleej Times.
The Dubai Financial Market’s General Index continued its steady progress last week as the benchmark index edged up 0.2 per cent to 1,468.34 points. The market witnessed low volumes throughout the week as the major investors preferred to stay on the sidelines. It traded below 50 million shares during last three trading days of the week and the same trend is likely to continue till Eid Al Fitr.
Banking shares moved in positive directions as blue chips shares posted steady growth last week. Emirates NBD and Dubai Islamic Bank rose 0.25 per cent and 0.5 per cent, respectively.
In property sector, Arabtec Holding and Emaar Properties gave support to the main index with modest gains in low-trade market activity. Arabtec advanced 2.98 per cent to Dh1.38 while Emaar climbed 1.81 per cent to Dh2.81. Union Properties fell 3.39 per cent to 37 fils.
The Abu Dhabi Stock Exchange also recorded lackluster trading activity last week as volumes dropped considerably due to lack of investors’ interest in the equities. The exchange handled as low as 27.35 million shares on Wednesday and mostly traded below 50 million shares last week, signalling muted buying interest and exaggerated stock moves.
Analysts ruled out any major shift in market trend and said low-trade activity will continue till Eid Al Fitr. They said market will see an upward trend in September as the investors awaiting clear picture of global economy outlook are expected to step in the ring. More info
muzaffarrizvi@khaleejtimes.com
