UAE stock markets edge up as oil gains

Equity markets in the UAE edged slightly higher on Wednesday, with the Dubai Financial Market (DFM) index finishing one quarter of a percentage point higher at 3,530.60, while the Abu Dhabi Securities Exchange increased by just 0.1 per cent to 4,539.11.

The cautious increase in values was underpinned by a half-percentage point climb in the value of Brent crude, which had increased to just under US$45.20 per barrel by 5pm.

The biggest gainer on the DFM was Marka, after the retail-focused business reported an 18 per cent quarter-on-quarter increase in revenue to Dh89.5 million. Its shares closed at Dh1.19 – a 6 per cent gain. Positive financial results also helped to push up Union Properties’ shares, which gained 2 per cent, closing at 76 fils after the company’s profit for the first six months more than doubled to Dh113.8m.

In Abu Dhabi, Taqa’s shares dropped by 3.5 per cent after the energy company reported a 40 per cent widening of second-quarter losses on the same period last year to Dh588m.

Analysis published yesterday by the Fitch Group-owned BMI Research showed the UAE’s equity markets were set to remain under pressure as a result of weaker oil prices, and the knock-on effect this has on government and retail spending. “Gulf markets have become highly correlated with oil prices since the end of 2014, and nothing points to an immediate delinking,” it said.

“Until a greater supply-side correction takes place in the oil market, the overall prospects for Mena equities will remain unappealing.”

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