Stocks News-Dubai May Stabilise But Hard To See Uptrend

Dubai’s bourse may stabilise on Tuesday after it neared technical support during Monday’s plunge, but there is no clear sign that the market will stage any extended rebound as uncertainty around Arabtec persists.

The emirate’s index plunged 4.4 per cent on Monday, bringing its losses from a multi-year peak hit in May to 27 per cent. Its close of 3,943 points was not far from the March low of 3,869 points, and twice on Monday the index bounced from near that support.

“We had some heavy selling at the beginning of the session and then some investors decided it was a good opportunity to buy,” said Sebastien Henin, head of asset management at The National Investor.

However, Arabtec continues to dominate trading on the bourse, tumbling its daily limit of 10 per cent on Monday, and until questions over its business strategy and relationship to major shareholder Aabar Investments have been clarified, investors may remain jittery – and continue to face margin calls related to Arabtec.

At Dhs2.61, Arabtec is no longer overvalued in the eyes of many of the analysts who still cover the stock. But most investors remain reluctant to buy it given the uncertainty, and it is still above levels of around Dhs2.00 seen at the end of last year before the bubble in the stock began forming.

Also, retail investors may continue to leave Dubai and other Gulf markets because of Ramadan, the Muslim holy month of fasting.