x Abu Dhabi, UAEWednesday 26 July 2017

UAE stock rally wavers on the bourses

Markets Wrap: UAE stock markets take a breather, as political unrest in Syria and Yemen provides an opportunity for profit taking.

The recent rally in UAE stocks wavered in trading today, with Abu Dhabi shares sinking and Dubai's market scraping into positive territory at the end of the day.

Investors were rattled by unrest in Syria, which the government says has claimed ten lives during the past two days, while worries mounted that Yemen would descend into civil war. Meanwhile, Japan's authorities warned that the Fukushima Daiichi nuclear power station had likely suffered a partial meltdown.

The Dubai Financial Market General Index rose 0.08 per cent to 1557.55, clinging onto a rise since the start of the month which has seen the index increase 9.32 per cent. Meanwhile, Abu Dhabi stocks declined 0.46 per cent to 2,633.57.

"It's a combination of geopolitical risk and international effects of the Japanese nuclear issues," said Marwan Shurrab, chief trader at Gulfmena Alternative Investments.

"This all combined with the strong performance we've seen would entice investors towards profit taking and taking some risk off the table," he said.

However, Mohammed Ali Yassin, chief investment officer of CAMP Investment CK, said the damage to markets from regional unrest could have been far worse. "Markets have taken it in their stride.

"They haven't been reacting violently to what's happening," he said. "The political risk effect is more on the sentiment than it is on fundamentals."

Many of Dubai's blue-chip companies saw large gains, steadying the index as a whole. Emaar, the Dubai-based developer, rose 0.63 per cent to Dh3.18 per share on the Dubai market, while Arabtec rose 1.83 per cent to Dh1.67 per share.

Meanwhile, Abu Dhabi Commercial Bank declined 2.05 per cent to Dh2.39 a share, as speculation mounted that the bank would move to sell its 25 per cent stake RHB Capital, a Malaysian lender.