Analysts are expecting a correction for UAE equities after Dubai's benchmark rose almost 3 per cent last week.
Investor focus shifting to dividends
Barring new political shocks, investors will turn their attention this week to dividend distributions and earnings predictions as the quarter comes to a close.
Regional bourses are coming off solid gains last week.
The Dubai Financial Market General Index reached a one-month high on Thursday, closing at 1,552.81 points. The Abu Dhabi Securities Exchange General Index advanced 1.1 per cent for the week to 2,632.95. The ADIB Islamic Index on MSCI UAE increased by 4.8 per cent to 924.5.
"We would expect to see some profit-taking towards the beginning of the week as market sentiment has shown some improvement," said Tariq Qaqish, a fund manager at Al Mal Capital in Dubai.
Several companies listed in Dubai are expected to distribute dividends or hold annual general meetings this week, the brokerage Alembic HC Securities said in a note to clients.
Emaar Properties is expected to hold its annual general meeting tomorrow. Shares of the region's biggest developer rose 5.7 per cent last week to Dh3.13.
Union National Bank is to distribute bonus shares on Tuesday in place of a cash dividend. The UAE lender rose 1.2 per cent to Dh3.34 for the week.
Air Arabia's cash dividend of 8 fils a share is to be distributed on Wednesday. The airline's stock rose 1.8 per cent to 82 fils.
Emirates NBD, the emirate's biggest lender, is to distribute its cash dividend of 2 fils a share on Thursday. The stock moved 1.5 per cent higher to Dh3.25 last week.
As the quarter closes this week, investors are positioning themselves ahead of earnings results. Regional banks will be in the spotlight after Dubai World announced the signing of a final agreement on the restructuring of US$24.9 billion of debt.
"UAE banks have already taken adequate provisions, in our view," Alembic HC Securities said in its note to clients. However, the brokerage said several local banks would be affected if Dubai World was unable to carry out asset sales or experienced insufficient cash flow.
There is also the possibility that liquidity from regional markets facing instability will continue to move to the UAE and other countries that are considered to be more stable, Mr Qaqish said.
Oil prices dipped slightly on Friday's close but remained above $100 a barrel. Brent crude for May settlement on the London ICE Futures Europe exchange was at $115.59 a barrel, down 13 cents, or 0.1 per cent. JPMorgan on Friday raised its oil-price forecast for the year by $6 to $110 a barrel.
New York crude has rallied 25 per cent since protests began last month in Libya, which is a member of Opec. The conflict is the bloodiest among the uprisings that have toppled the presidents of Tunisia and Egypt and spread to Algeria, Bahrain, Iran, Oman, Syria and Yemen.
The Egyptian Exchange reopened on Wednesday after closing on January 27 amid protests that eventually ousted Hosni Mubarak from the presidency. The market shed nearly 10 per cent of its value at the opening and trading was suspended for about 30 minutes.
"We'll have to wait and see as the dust settles," said Saleem Khokhar, a fund manager at National Bank of Abu Dhabi.
"One would expect pressure on Egyptian equities to continue for the time being, but there will be a point in time where they will be increasingly attractive."
The Kuwaiti index advanced 0.5 per cent last week to 6,285. Also last week, Oman's benchmark rose 0.7 per cent to 6,402.27, Qatar's declined 1 per cent to 8,308.85, Bahrain's advanced 2.2 per cent to 1,422.57, and the Saudi Tadawul All-Share Index rose 0.2 per cent to 6,362.42.