“We expect markets to remain choppy during the holy month of Ramadan,” Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s Asset Management Group, told Khaleej Times.
UAE stock markets are expected to begin lacklustre trade this week, as investors usually prefer to stay on the sidelines in the holy month of Ramadan, which starts today.
Equities in the country, which ended the last trading session on a mixed note, are likely to remain steady in thin trading activity throughout the week. Fund managers and analysts do not expect major movements and said investors have already been liquidating their positions before Ramadan.
“We expect markets to remain choppy during the holy month of Ramadan,” Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s Asset Management Group, told Khaleej Times.
The Dubai Financial Market’s General Index, which shrank eight per cent last week, offers good investment opportunities to investors in key sectors including in real estate, construction, banking and finance, among others. Shares of leading property and construction firms tumbled heavily recently and offers attractive entry points at low valuations, they said.
Arabtec, which remained among the top losers last week, shed 27.23 per cent. Union Properties and Deyaar also lost 15.79 per cent and 11.76 per cent, respectively. Property giant Emaar dropped by 6.26 per cent and closed the week at Dh8.98.
“The construction sector had the biggest run-up this year and hence these shares are suffering the most on the way down, which is typically what happens when a sector rises quickly,” Shailesh Dash, chief executive of Al Masah Capital Management, told Khaleej Times.
“Arabtec in particular had the worst of it because of the internal corporate governance changes going on within the company, which began with the CEO stepping down. This could cause execution risk for their backlog and new projects,” he added.
The Dubai market, which is down 22 per cent from its multi-year peak in mid-May, is still up about 25 per cent year-to-date. In June, the benchmark index lost approximately $11 billion in market capitalisation, which stood firm at $84.25 billion compared to $95 billion at the end of May.
Market capitalisation at the Abu Dhabi market, which fell 2.89 per cent last week, also noted slight loss this month as it shrank to $133.94 billion from $134.59 billion in May.
Fund managers and analysts said second-quarter result announcements next month may drive trading activity towards the end of Ramadan by generating investors’ interest in key scrips and blue-chip firms.
“Earnings season will start by the middle of next month and may revive investors’ interest in markets,” said an analyst.
