Abu Dhabi's biggest banks helped prop up the capital's market as anticipation grows over the next bout of second quarter results
Banking stocks boost for Abu Dhabi bourse
The capital's banking stocks helped prop up the Abu Dhabi Securities Exchange General Index as investors are looking for strong results from the heavyweight sector.
Abu Dhabi Commercial Bank gained 2.2 per cent to Dh3.23, while Abu Dhabi Islamic Bank advanced 2.4 per cent to Dh3.39.
Union National Bank rose 1.1 per cent to Dh3.60. But First Gulf Bank, the second-biggest bank by market capitalisation in the UAE, lost 0.3 per cent to Dh17.95. Analysts said second-quarter banking results were expected to reflect narrowing provisions and smaller numbers of non-performing loans.
"For the GCC's banking sector, we forecast Union National Bank and First Gulf Bank to report strong year-on-year earnings growth," said Mahmood Akbar, a research analyst at SICO, a brokerage based in Bahrain. He said lower provisions would act as the main boost to better results in the coming weeks, citing Qatar National Bank and SABB, a Saudi bank.
The Dubai Financial Market General Index closed 0.2 per cent higher at 1,559.00 points, as the bourse operator DFM Company rose 0.8 per cent to Dh1.21, its highest gain in just over a week.
This came as the company brought in Arab German International Broker to implement margin trading, the practice of borrowing money from a broker to buy a stock.
The mechanism is popular in more developed international markets and the lack of such complex financial instruments has been cited as one reason MSCI neglected to upgrade the UAE to "emerging" market status.