Mixed day for UAE bourses

UAE stocks ended the day mixed yesterday amid lacklustre trade as investors awaited signs of how the drop in oil will affect company earnings.

The benchmark Dubai Financial Market General Index rose 0.3 per cent, while the Abu Dhabi Securities Excgange General Index fell by an identical per cent.

Union Properties led the gainers on the DFM, adding 2 per cent, while Al Dhafra Insurance led the declines in the capital, dropping 10 per cent.

“The last few weeks have been extremely dull in terms of trading volumes,” said Sachin Mohindra, a portfolio manager at Invest AD, an Abu Dhabi-based asset manager. “It’s been a slow grind down. I don’t think there are any fundamental reasons for this. There’s no positive or negative trigger to make the market trend in either direction.”

“The market has been driven by retail investors, there’s not that much institutional activity,” he said. “The next trigger is the first quarter results. From now until April, there appears to be no fundamental triggers. My view for the UAE is that I don’t anticipate any slowdown this year despite the significant weakening in oil prices.”

Stocks in the Arabian Gulf took a hammering in December as the price of crude oil plummeted more than 30 per cent, with many benchmark equity indexes, including Dubai, dropping just as much before making a partial recovery.

As a result, Dubai’s main gauge pared its 2014 gains to 12 per cent and so far this year has dropped 0.6 per cent.

The UAE is the world’s eighth- biggest oil producer and the federal government funds more than 60 per cent of its budget from crude exports, while in neighbouring Saudi Arabia, the world’s largest oil exporter, the reliance is greater still.

mkassem@thenational.ae

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