x Abu Dhabi, UAESunday 23 July 2017

UAE markets contract despite Abu Dhabi property rally

On a day which saw UAE markets struggle from the outset Abu Dhabi property rallied but was unable to help its bourse close up by end of trading .

Rising property stocks in Abu Dhabi could not help lift its bourse into positive territory on a day which saw UAE markets contract before the close of trading.

In Abu Dhabi Aldar Properties rose 1.4 per cent to Dh2.21 and Sorouh Real Estate gained 1.2 per cent to Dh1.63 on the day the company's chief operating officer said the developer had started an aggressive "default avoidance" programme after seeing up to eight per cent of buyers on its Reem Islands project pull out of contracts. RAK Properties, which rose 2.2 per cent during intraday trading, closed flat at Dh0.45. However the Abu Dhabi Securities General Index closed marginally down at 0.05 per cent to 2,729.87 points.

The Dubai Financial Market (DFM) General Index dropped 0.3 per cent to 1,668.82 points as Emaar Properties slipped 0.8 per cent to Dh3.62, after rising 1.4 per cent earlier in the week as its chairman said the property sector will pick up.

Elsewhere in real estate, Arabtec fell 0.5 per cent to Dh1.82.

"Ever since the fall [of the market in 2009], everyone understands how oversupplied the market is," said Hassan al Salah, head of institutional sales at AlRamz.

But he said some positive momentum came from traders going for "conviction buys", or stocks that are expected to outperform the market in the future, and used Air Arabia as an example.

The stock has a yield of 12 per cent on its dividend though it closed down 0.3 per cent to Dh0.78.

"Some names are still getting picked up but not going into force because the market can't handle the volume right now," he said.

Negative sentiment prevailed elsewhere in the region: Qatar slipped 0.2 per cent to 8,142.12; Oman fell 0.2 per cent to 6,592.00; Bahrain lost 0.06 per cent to 1,437.94; Kuwait decreased 0.3 per cent to 6891.00 and the Saudi Tadawul All-Share Index moved 0.3 per cent lower to 6,310.00.