Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
UAE stock markets closed lower on Thursday amid what appeared to be a deteriorating geopolitical situation.
The ADX General Index (FADGI) fell 0.614% to close at 10,205.96. The session recorded 22,852 trades involving 389 million shares worth Dh1.25 billion. The total market capitalisation of ADX-listed companies stood at Dh2.667 trillion. First Abu Dhabi Bank (FAB) shares worth Dh41.6 million changed hands in three bulk trades, ADX data showed.
Banking stocks traded mixed as a global sell-off in government bonds gathered pace and expectations of further interest-rate increases intensified. FAB lost 1.39%, while Abu Dhabi Commercial Bank dropped 0.48%. Abu Dhabi Islamic Bank bucked the trend, gaining 0.34%.
Most ADNOC-linked stocks came under pressure during a volatile session. ADNOC Logistics and Services declined 1.1%, ADNOC Drilling lost 1.21% and ADNOC Distribution fell nearly 1%. ADNOC Gas bucked the trend, gaining 1.53%. Fertiglobe advanced 1.58%, while Borouge declined 0.42%.
Real estate major Aldar gained 0.74%, maintaining its momentum despite pressure on other sectors.
Among holding companies, 2PointZero declined 0.88% to Dh2.26, while Alpha Dhabi slipped 0.13% to Dh7.60.
MAIR Group, which has its roots in the UAE cooperative movement, rose 2.51% after signing an agreement to acquire a 70% stake in the company that owns a Turkish-origin coffee brand.
Healthcare company PureHealth advanced 2.5%, while telecom operator e& lost 1.27%.
In Dubai, the Dubai Financial Market General Index (DFMGI) fell 0.416% to close at 5,983.05. The session recorded 14,183 trades, with 254 million shares changing hands for a total value of Dh583 million. Market breadth was negative, with 18 gainers and 24 decliners, while nine stocks remained unchanged.
Real estate major Emaar Properties gained 0.17%, while its subsidiary Emaar Development added 0.45%.
Banking stocks also came under pressure on the DFM, with Emirates NBD losing 2.48% and Dubai Islamic Bank declining 0.55%.
Toll-gate operator Salik advanced nearly 2%, while utility provider DEWA slipped 0.73%. Telecom operator du lost 0.33%, while Sharjah-based airline Air Arabia rose 0.82%.
“Thursday was a session that needs to be read carefully. The broader picture is more encouraging than the decline in the indices suggests. On a day when the US 30-year Treasury yield touched 5.45%, its highest level since 2004, and the 10-year yield remained near 5.11% after a 15-basis-point surge, a decline of less than 1% demonstrated composure rather than weakness,” Sayed A., Chief Business Officer at Graystone Capital, said.
Referring to the decline in banking stocks, Sayed said: “With markets now positioning for further Fed tightening after last week’s rate increase, and with the dirham’s peg transmitting US interest rates into local pricing, some rotation out of financial stocks was inevitable.”
Commenting on the divergent performance of ADNOC-linked stocks, he said: “Producers and feedstock-linked businesses capture the benefit of higher prices, while logistics and drilling companies bear the costs associated with a more complicated operating environment.”
Referring to the bulk transactions in FAB shares, Sayed said: “The bulk trades suggest that institutional investors remained active and selective, rather than heading for the exit.”
Selected high-quality stocks held their ground, he said. Aldar’s gain extended a positive run supported by earnings momentum and a property market that continued to attract international capital, he added.
“MAIR Group’s deal is a reminder that corporate activity in this market has not paused,” Sayed said. “Sessions such as Thursday’s do not change the investment case for UAE equities. If anything, they reinforce it,” he concluded.
