UAE stocks continued to inch lower yesterday amid lacklustre trading as the Easter holidays kept many markets around the world closed, reducing foreign participation.
Emaar Properties, the biggest publicly traded real estate company in the UAE, led losses in Dubai, while Abu Dhabi Commercial Bank spearheaded the decline in the nation’s capital.
The Dubai Financial Market General Index and Abu Dhabi Securities Market General Index both declined by 0.4 per cent. The benchmarks have fallen in the past week after a rebound from lows in January into a bull market fuelled by a rebound in oil prices.
Portfolio managers say that while UAE stocks are attractive relative to their peers in the region, the pick-up in prices last month had left them slightly expensive. The outlook for corporate profitability remains murky, and negative surprises could be on the way when companies and bank unveil corporate earnings in the coming week, they say.
Thus far, earnings have held their own despite the onslaught of lower oil prices. The price of oil has shed more than 60 per cent of its value since the middle of 2014, but it has affected some Arabian Gulf countries more severely than others. On the whole, the UAE has a more diverse economy, and that has kept its economy growing at about 3 per cent.
That resilience may wane if the price of crude does not continue to rebound from its lows, according to a report yesterday from the investment bank Alkhabeer Capital.
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