A rally across Dubai's property sector pushed the emirate's index higher yesterday, even as Arabtec's recent rise went into reverse gear.
DFM rises but Arabtec slides
A rally in Dubai's property sector pushed the emirate's index higher yesterday, even as Arabtec's recent rise went into reverse.
Emaar and Drake & Scull International led the Dubai market's rise, while the Dubai Financial Market Company, the entity through which the bourse's own stock is traded, rallied 1.9 per cent to 82.2 fils as trading improved.
Arabtec's recent rise was blunted by investor disquiet over a rally in which the stock has increased 67.3 per cent so far this year, without a major new contract for the company's order book to account for the gains.
The stock closed at Dh2.66 yesterday, 1.4 per cent below its opening price, after falling as low as 5.5 per cent in the course of the day. The decline ended a seven-day streak of gains.
But Arabtec's recent surge had driven substantial levels of trade to the DFM, also boosting other construction companies, said Yong-Wei Lee, a senior fund manager at Emirates NBD.
"There's nothing concrete from the company. What we've been hearing is still speculation," he said.
Yesterday's correction "doesn't seem too surprising, given the run-up so far this year", he said.
However, Mr Lee warned that the recent increase in trading activity offered little certainty that liquidity on the UAE's markets would continue during the months ahead.
"Arabtec volumes still account for a large proportion of volumes traded in the market," he said. "The question is, how sustainable is this?"
The capital's market was led lower by Etisalat, which fell 0.3 per cent to Dh9.45.
Oil prices fell, snapping four days of consecutive gains. Brent crude futures declined US$1.42 to $116.29 a barrel.