RIYADH: Shares in Dubai and Saudi Arabia trimmed strong early gains yesterday to finish the day marginally up, as concerns about regional and global economic stability continue to weigh on the mind of the region’s retail investor base.
In morning trade, regional equities started the week in positive territory on stabilising global stock markets and a rally in the price of oil at the end of last week.
China’s Shanghai Composite Index, which triggered global panic selling early last week, rose 10.4 per cent across Thursday and Friday.
In New York, the Dow Jones Industrial Average, which fell 3.57 per cent last Monday, ending the week in positive territory, closing down slightly on Friday.
Brent crude rose by 5.24 per cent on Friday to US$50.05 per barrel, as short sellers moved to close their positions.
Stock markets in Dubai and Abu Dhabi opened up 3.1 per cent and 1.8 per cent respectively, while Saudi Arabia’s Tadawul opened up 4.5 per cent.
All three markets tailed off as the day went on, however, with retail investors booking profit.
The Dubai Financial Market General Index closed up just 1.1 per cent at 3,689.55, with Saudi’s Tadawul All Share Index also ending up 1.1 per cent at 7,690.4.
The Abu Dhabi Securities Exchange General Index ended down 0.1 per cent at 4,453.62.
“The fizzling out of early gains suggest there’s still a lot of concern about where global growth is headed, and how Asian markets are going to open on Monday,” said Julian Bruce, the head of institutional trading at EFG-Hermes in Dubai.
Shares in Damac Properties were the main winners on the Dubai bourse, ending the day up 7.0 per cent at Dh3.36. The index heavyweight Emaar Properties ended in the black for the third consecutive day, closing up 2.7 per cent at Dh6.70.
Etisalat and Abu Dhabi Commercial Bank were the main gainers in Abu Dhabi, counterbalanced by falls from FGB and Abu Dhabi Islamic Bank.
“There wasn’t a lot of activity from regional institutions today, there was more of a retail- driven feel,” said Mr Bruce. “It’s only once we see the return of more institutional flows that we might get an idea of where things are headed.”
Regional bourses still remain at the mercy of the price of oil in spite of the recovery, said Sebastien Henin, the head of asset management at The National Investor in Abu Dhabi.
“The visibility on oil is still not great,” he said, noting that last week’s rally was largely down to traders covering their short positions.
