Markets Update: Dubai's stock-market sees surge in trading activity after Drake & Scull International annual profit beat estimates amid speculation that other property and construction stocks will follow suit.
Second-tier rally in UAE capped off
The Dubai Financial Market rallied yesterday as retail investors bought up small-cap stocks.
The DFM General Index rose 2.1 per cent to 1,521.56. Traded value reached Dh381 million, compared with a daily traded average of Dh161m, and a stark contrast with Dh128m last year.
"It's very speculative. This is the second tier of stocks that are beginning to rally," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi. "We already saw a decent run in big caps with the likes of Emaar Properties and Arabtec Holding."
Earlier Drake & Scull International said full-year profit increased 36 per cent, beating analyst expectations. The contractor's stock rose 1.1 per cent to 97 fils after net income reached Dh220m last year. Analysts polled by Bloomberg News had expected DSI to report a profit of Dh207m. Other property and construction stocks also surged amid speculation about strong fourth-quarter results.
"This is UAE and GCC high-net-worth individuals that are driving the market," said Anastasios Dalgiannakis, the head of trading at Mubasher Financial Services in Dubai. "The retail investor is much more confident and taking more risks as well, while foreign participation remains subdued."
The Abu Dhabi Securities Exchange General Index rose 0.4 per cent to 2,466.03.
Elsewhere in the region: Kuwait's index rose 0.7 per cent to 5,946.00; Bahrain's measure gained 0.3 per cent to 1,143.11; Oman's MSM 30 Index slipped 0.3 per cent to 5,589.07; and Qatar's QE Index was little changed at 8,694.77. The Saudi Tadawul All-Share Index rose 0.4 per cent to 6,831.56.