UAE investors stay on the sidelines

UAE shares were mixed in subdued trading on Wednesday ahead of the US Federal Reserve’s announcement on interest rates.

The Fed was last night expected to raise interest rates for the third time since the end of the global financial crisis, but traders were anticipating comments by Janet Yellen, the Fed’s chairwoman, on the future direction of the US economy.

The Dubai Financial Market General Index rose by nearly 0.3 per cent to 3,478.81, with trading volumes down 50 per cent from the previous session. Emaar Properties and Dubai Investments led gains, up 0.6 per cent and 0.8 per cent, respectively.

“Expectation of the Fed’s decision has been widely broadcast and no one’s really expecting any surprises but there was natural caution ahead of Wednesday night’s decision,” said Julian Bruce, the head of institutional trading at EFG-Hermes in Dubai. “There was some early strength in Dubai on the oil rebound but it soon fizzled out and trading was lacklustre overall.”

Brent crude futures rose as much as 2 per cent to just under US$52 per barrel in the late afternoon, following a surprise drop in US inventories. Oil was also boosted by comments by the International Energy Agency that Opec production cuts would lead to a global deficit of 500,000 barrels per day by June.

Trading in Abu Dhabi hit a new low for the year, falling to one-third of the daily average for the past three months.

The Abu Dhabi Securities Exchange General Index closed about 0.3 per cent lower at 4,375.35, with gains by FGB and ADIB balanced out by falls by ADCB and Etisalat.

In Saudi Arabia, the Tadawul finished up 0.7 per cent, with Al Rajhi and NCB leading gains by banking stocks.

jeverington@thenational.ae

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