UAE markets witnessed a very turbulent 1Q2011. Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) had a very short-lived gaining streak that lasted only during the first two weeks of January 2011. Soon afterwards, both markets were hit hard and started receding, as they were negatively impacted by the political insatiability in the region. Rumors also played a big role in rattling the markets.
Talks about deals like Etisalat‘s acquisition of a 46 per cent stake in Kuwait-based Zain Group, had taken UAE markets for a bumpy ride. In the meantime, Real Estate companies carried on their post global economic crisis struggle. Several companies were still in the process of rescheduling their debts and cleaning up their balance sheets.
However, during March 2011, UAE markets changed their direction and headed higher, as several positive indicators aided the markets to firm up their gains. One of the most important triggers was Dubai World’s agreement to restructure approximately $25 billion worth of debt with 80 creditors, which showed that the emirate is a transparent and a stable place for business. In addition to that, in light of the recent events within the Middle East, UAE markets emerged as the regional safe haven, which drew back investors and funds to the markets.
The ADX traded relatively in a narrow range during the quarter (between +1.63 per cent to -7.08 per cent). ADX General Index ended at 2,607.12 points, down by 4.15 percent. Meanwhile, the DFM had a more volatile trading pattern. DFM General Index had a good start at the beginning of the year, and managed to appreciate by 2.34 percent during its first trading week of January 2011. However, the index dipped by 17.07 percent in March 2011, before bouncing back up to close at 1,556.04 points, down by 4.57 percent by the end of 1Q2011.
Trading Activity
During 1Q2011, total volume of shares traded on the ADX stood at 4.55bn shares at an aggregate value of AED7.30bn ($1.99bn). The Real Estate sector was the most active in terms of volumes and values of shares traded during 1Q2011, with 2.34bn shares exchanged at an aggregate value of AED3.20bn ($871.3mn). Al Dar Properties witnessed intense trading activity, as it was the most traded stock in terms of volume and value traded, with 1.31bn of the company’s shares changing hands, at an aggregate value of AED2.27bn ($617.9mn).
Over on the DFM, 7.44bn shares were traded at a total traded value of AED10.91bn ($2.97bn). The Real Estate & Construction sector was the most active in terms of volume and value of shares traded during 1Q2011, with 3.87bn shares exchanged at an aggregate value of AED6.50bn ($1.77bn). Arabtec Holding Company was the volume leader for this quarter with 1.36bn shares traded. While Emaar properties stock was the most active when it came to value traded, which stood at AED3.17bn ($861.9mn).
Sectoral performance
In ADX, performance was negative, with all nine sectoral indices ending the quarter on a lower note. The Real Estate index posted the steepest decline, down by a noticeable 26.17 per cent. Within the sector, Al Dar property was hit the hardest during the period, with its share price declining by 33.33 per cent, and ending at AED1.52.
Aldar was burdened by heavy debts, and had to issue AED2.8bn ($763mn) of mandatory convertible bonds to its shareholder Mubadala, bringing the latter’s stake in Aldar from 20 per cent to 49 per cent. Sorouh Real Estate Company and RAK Properties also had negative performance, with their share price dipping by 19.02 and 11.36 per cent, respectively. The Construction Index was also a notable decliner, down by 15.95 per cent, as the share price of Fujairah Cement Industries (FCI) dipped by 65.67 per cent during the first three months of the year 2011. FCI’s ended the quarter at AED1.03. Meanwhile, share price of Arkan Building Materials, the biggest construction company in terms of market capitalization, dipped by 3.51 per cent, and ended at AED1.65.
In Dubai, sectoral performance was also negative, with only two out of the nine sectoral indices ending with gains. On the negative side, The Utilities sector posted the steepest decline, with its index ending down by 31.74 per cent. The share price of National Central Cooling Company (Tabreed), the only component of the index, dropped by the same percentage, as it closed at AED1.14. Furthermore, Materials index was also a notable decliner, as it lost 8.77 per cent of its value.
The sector’s loss was mainly attributed to an 8.77 per cent drop in the share price of National Cement Company, which ended the quarter at AED3.12. On the other hand, Telecommunications index managed to post 10.49 percent in quarterly gains, reflecting the positive performance of heavy-weight Emirates Integrated Telecommunications Company (DU), which managed to add 10.49 per cent in gains to its share value, to end the quarter at AED3.16. Du’s share price got a boost on good FY2010 annual results, with the company’s net profits reaching AED1.31bn ($356.7mn), up by 396.1 per cent YoY.
Market Capitalisation
By the end of 1Q2011, the market capitalisation of listed companies on the ADX stood at AED280.9bn ($76.5bn), down by AED3.9bn ($1.1bn), compared to AED284.7bn ($77.5bn) by the end of 4Q2010.
When it comes to the market capitalization of listed companies in the DFM, the value stood at AED196.6bn ($53.5bn), down by AED4.26bn ($1.16bn), compared to AED200.9bn ($54.7bn) by the end of 4Q2010. (source ; http://www.cpifinancial.net/v2/fa.aspx?v=0&aid=876&sec=Market/%20Commodities/%20Forex For the latest updates PRESS CTR + D or visit Stock Market news Today
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