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Etisalat shares fall on back on Syria deal pull-out

Markets Update: Traders hope for a quiet end to an eventful quarter, with Dubai's market breaking through double-digit gains for the month.

Etisalat shares dropped this morning on the back of news it had pulled out of a Syria deal this morning as a quarter overshadowed by political tumult throughout the region comes to a close.

The Dubai Financial Market General Index was up 0.71 per cent to 1,554.78 in early trading, while Abu Dhabi stocks have fallen 0.82 per cent to 2,611.41.

Though both indexes are down since the beginning of the year, March has seen gains for both markets. The Dubai measure has gained 10.16 per cent since the end of February, while the Abu Dhabi Securities Market General Index has increased 0.87 per cent during the same period.

Traders said they expected a quiet end to a chaotic quarter. "There's no major news on the market. I don't think we'll see any major movement," said Alfred Fayek, head of Mena equity sales at EFG-Hermes.

One of the morning's losers has been Etisalat, which has lost 3.21 per cent to Dh10.55 per share. The telecoms company said yesterday it would not bid for a mobile licence in Syria, despite having earlier qualified to take part in the process.

However, Mr Fayek said that the stock's performance would improve in the long-run: "Etisalat is pulling out from the Syria opportunity. I think that's healthy for them."

With an absence of news events, brokers said that investors seeking short-term gains were dominating the market.

Vyas Jayabhanu, the head of investments at Al Dhafra Broker, said: "Blue chips are moving in a very typical range in a very small band. Emaar is more active as usual. Speculators are in the market more than long-term traders."

He said that while the UAE's markets were still attractively valued, investors were choosing to seek returns elsewhere.

"The price-to-earnings ratios are attractive now, but people prefer to go to emerging markets where there are more opportunities for profit."

Traders said markets were becoming more optimistic about the global recovery, with political issues starting to take a back seat.

Asian stocks rose in the early hours, with the Nikkei 225 rising 0.48 per cent to 9,755.10 and the Hang Seng index rising 0.47 per cent to 23,560.31, erasing most of the losses since Japan's earthquake.

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