By: Mahmoud Gamal

Dubai – Mubasher: The UAE stock markets are expected to rise prior to the end of the current year as stocks are testing attractive buying levels, in line with the completion of ADNOC Distribution’s initial public offering (IPO).

The Dubai Financial Market General Index (DFMGI) has recently maintained the declining performance last week with a medium liquidity, which does not reflect a high selling power, market expert Bayan Nabil Told Mubasher.

Nabil added that according to technical theories stock markets’ bearish performance does not require a high volume of trade, unlike the bullish performance which requires high purchasing power to push indices higher.

The absence of buyers and their disinterest in trading drag indices down, he added. 

The analyst attributed the current negative performance to Emaar Properties’ distributions of dividends as traders did not react positively to it, noting that these distributions were remarkably reflected in the stock’s price.

Emaar’s stock fell 10% last week to AED 6.95 last week, which affected the other stocks and drove the DFMGI below the level of 3,400 points, he indicated.

The DFMGI broke 3,382 points, closing the week at 3,355 points to start a downward wave, he said, anticipating this wave to be the last.

The last bearish wave is forecast to see some secondary rebounds before the index starts recovering and seeing a new upward trend over the coming first quarter of 2018, he alluded.

Nabil had previously noted that the index would rebound at 3,503 points and would stay weak below 3,550 and 3,580 points to drop below 3,307 points or even 3,250 points.

The index may test support between 3,333 and 3,307 points to rebound, he forecast.

The current prices of stocks are considered as a buying opportunity to reinforce positions over the coming three to five months, he said, adding that the current levels are not selling levels.

Moreover, financial analyst at Menacorp Financial Services Essam Kassabia stressed that the new year and the traders’ eagerness to create new purchasing positions, particularly significant financials’ stocks such as Emaar, will boost the stock markets’ liquidity and push the indices higher.

Translated by: Mai Ezz El-Din