Tamweel shines as UAE shares report more gains

18 April 2008

Abu Dhabi - UAE stocks continued their uptrend, making strong gains on the last trading day of the week, and lifting the Emirates Securities general index 0.64 per cent above its level on December 31, 2007.
Bullish trading resumed at Dubai Financial Market (DFM) where the general index advanced 1.25 per cent to 5,584.66, and Dh1.88 billion worth of shares changed hands.
DFM's shares were the heaviest traded accounting for more than Dh344 million worth of transactions, followed by Emaar Properties which reversed course gaining 0.45 per cent to close at Dh11.15. DFM surged 3.78 per cent to Dh5.49.
Biggest gainer
The biggest gainer, however, was Tamweel which shot up 5.1 per cent to Dh7.83, while Arabtec continued its uninterrupted gains assign 3.48 per cent to its value to close at Dh14.85.
Only five out of the twenty six traded companies recorded losses, of which most notably is Deyaar Development which retreated 0.85 per cent to Dh2.33, affected by the troubles facing its management and board of directors.
In Abu Dhabi, the general index advanced 0.68 per cent to 4,910.78 on relatively heavy trading worth Dh1.11 billion.
The real estate and banking sectors were the best performers, as the rally on Aldar Properties resumed lifting the price up 1.37 per cent to Dh11.20. Sorouh Real Estate maintained the upward trend as well advancing 0.63 per cent to Dh9.58.
In the banking sector, First Gulf Bank reported an impressive 4 per cent of gains to close at Dh22.00, followed by the National Bank of Abu Dhabi, the largest listed bank in Abu Dhabi in terms of market capitalisation, which advanced 2.44 per cent to Dh20.95.
Nevertheless, the market's total gains were negatively affected by etisalat's decline of 0.46 per cent to Dh21.80.
Overall, the Emirates Securities general index gained 1.01 per cent to close at 6,054.89 and to lift the market value of the listed shares up by Dh8.4 billion to Dh842.5 billion.

By Ahmed A. Elewa
© Gulf News 2008

UAE shares gain Dh5.2b in market capitalisation

By Ahmed A. Elewa, Senior ReporterPublished: April 07, 2008, 00:05

Abu Dhabi: UAE markets started the week on a positive note adding Dh5.2 billion in capital gains after raking in Dh16.1 billion last week, taking the total value of listed companies up to Dh823.99 billion.
The Emirates Securities general index advanced 0.63 per cent to 5,921.74 to minimise the losses recorded since the beginning of the year to less than 1.6 per cent.
Positive investor sentiment in Dubai drove the general index up 0.92 per cent to 5,516.13 in relatively heavy trading worth Dh1.36 billion of transactions.
Emaar's agreement with DP World in relation to the development of King Abdullah Economic City in Saudi Arabia had a positive impact on the developer, lifting it up 0.44 per cent to Dh11.40.
Its financial arm, Amlak Finance, shot up almost three per cent to Dh4.53. Dubai Investment rose 2.92 per cent to Dh4.23.

All the sectors ended the session in positive territory with the exception of the utilities sub-index which retreated marginally by 0.37 per cent.
In Abu Dhabi, real estate companies dominated the market as the three listed developers accounted for heavy trading. The general index rose 0.29 per cent to 4,772.96.
More than Dh492 million worth of real estate shares changed hands in the market's total value of transactions worth Dh991.5 million.
Ras Al Khaimah Properties continued its impressive advance gaining 5.36 per cent to close at Dh2.43.
Aldar Properties added 1.85 per cent to its value to close at the Dh11 mark, while Sorouh real estate retreated marginally by 0.21 per cent to Dh9.13.
Overall, the real estate sub-index reported the strongest gains and advanced by 1.24 per cent.
The energy sector was also among the best performers, especially Aabar Petroleum, which gained 2.08 per cent to close at Dh3.40.

http://www.gulfnews.com/Business/Markets/10203625.html

Abu Dhabi Securities Market (ADSM) turnover surges for second day

10 April 2008

Turnover on the Abu Dhabi Securities Market dwarfed that of the Dubai Financial Market for the second day running on Thursday. More than Dh1.4 billion of shares changed hands on the ADSM to push it up 1.52 per cent to 4,877 points, while the Dubai Financial Market also ended in the green, rising 0.38 per cent to 5,453, despite a turnover of just Dh735 million. This reversal of the usual trading pattern is baffling analysts because there is no fundamental reason for the sudden shift to Abu Dhabi. Some believe it could be a form of market manipulation by major funds, who are concentrating on the Abu Dhabi bourse to create high volumes and volatility to persuade day traders to dump stocks in Dubai and switch to the capital. At this point, these funds can then buy the day traders' Dubai stocks on the cheap, while simultaneously selling their Abu Dhabi holdings at inflated prices. Such a strategy implies the ADSM could be heading for a fall, although analysts believe it should remain buoyant until the middle of next week at least. "Dubai trading is flat and what happened in Abu Dhabi on Wednesday and Thursday can't be justified," said Ayman El Saheb, Darahem Financial Brokerage director of operations. "Abu Dhabi securities were targeted, particularly in real estate, while Dubai stocks were ignored, yet it's common knowledge that speculators prefer Dubai because it has more traded stocks to play with." Aldar Properties was the ADSM's most active share in cash terms as it climbed 1.38 per cent to Dh11.05, its highest close for more than a month. The capital's heavyweights also prospered, with National Bank of Abu Dhabi surging 2.02 per cent, while etisalat fared even better, jumping 3.28 per cent. The telecoms operator has been in high demand since its share price was adjusted to allow for the issue of bonus shares and has added 12 per cent in April. Rak Properties, Sorouh Real Estate an Arkan also all gained more than one per cent. Meanwhile, the DFM's General Index was blighted by the usual late sell-off, which saw the index drop 60 points in the final hour's trading. This decline saw Emaar fall 0.44 per cent to Dh11.10, making yesterday the first time Emaar and the DFM General Index has moved in different directions since March 26. "Dubai has been lacking momentum, with insufficient liquidity to sustain at current levels, so this week we saw a couple of gains, but overall the index fell," said Saheb. Arabtec posted a new all-time high for the second successive session, this time rising 3.81 per cent to Dh13.60, to make it Dubai's fourth-best performer yesterday. This latest rise means the construction firm has surged 12.4 per cent in the two sessions since announcing the winning of a Dh3 billion contract to build 2,600 homes. Beside Arabtec, the other companies on the DFM's top five gainers list were all small-cap companies, with a combined turnover of just Dh370,000. Like Wednesday, Dubai's blue chips saw little action, with du and the DFM's own stock closing unchanged, while Dubai Islamic Bank and Emirates NBD added 0.21 and 1.37 per cent respectively.

Dubai Financial Market's first quarter net profit reaches AED 314 million, up 231 per cent

Dubai, April 13, 2008

Dubai Financial Market Company (DFM company) today announced its preliminary financial results for the first quarter of 2008.

DFM company recorded a net profit of AED 314 million from operational activities and investments for the first quarter of 2008, an increase of 231 per cent compared to AED 95 million from operational activities and investments for the same period in 2007. The company recorded total revenues of AED 351 million during the first quarter of 2008, including AED 273 million from operational activities and AED 78 million from investments, up 158 per cent compared to AED 136 million in total revenues for the same period in 2007.

Essa Kazim, Chairman of Dubai Financial Market, said: "We are very pleased with our financial results in the first quarter of 2008. Our continued profit and growth is due in no small part to the confidence expressed in our institution by investors and the success of the Dubai Financial Market. Investors are drawn to a market and company that is dynamic, and that gives them unlimited possibilities.

The DFM company is the result of a unique initiative for the region, giving investors the ability to purchase a piece of a financial market itself, as well as allowing investors to directly participate in the economic future of Dubai. We fully intend for the success of this company to continue by implementing groundbreaking programmes that give investors abundant opportunities for strong returns.

What is the state of the UAE Stock Market

By Tamer BazzariIn

In 2002, as I was working as the Senior Advisor to the Dubai Financial Market (DFM), the coffee boy came into my office with a big smile on his face and a plate of sweets. I asked him what the occasion was; thinking one of my colleagues got married or had a new born. He said: sir, you didn’t hear the good news? we had record trading today...the DFM’s trading value had hit a new high of AED 10 million for the day !These days, only three years later, some investors refer to days where DFM trading value is below AED 1 billion as “a slow trading day”.The UAE market was the best performing market in the world for the first half of 2005, more that doubling in 6 months, while the DFM was the best performing stock market in the region in 2004.The UAE stock market is driven by liquidity and high oil prices. Despite record earnings for many UAE public companies, the pace of increase in the stock market is just too fast. Valuations in the UAE market reached worrying levels as of the end of June 2005 but have since gave up some of the gains. The price to earnings ratio based on 2004 results reached 38 at the end of July 2005. Despite the good Q1 and Q2 2005 earnings, the forward P/E ratio continues to be high at 25 based on expected 2005 earnings. The price to book value of the UAE market is an alarming 7 times. Another worrying ratio is the market capitalization to GDP, which, at normal levels, should be around the 50% level. Based on 2004 UAE GDP, this ratio reached 185% at the end of July 2005. Many argue that this is a different era, earnings are solid, growth is sustainable and oil prices will remain high. Many argued during the tech boom that the conventional ways of valuing companies are no longer valid and that growth companies need to be valued in a new fashion. But fundamentals are fundamentals, and investors in Arab markets need to, more than ever, seek to invest based on value, not fad. Investors should look not just at earnings, but at quality and sustainability of earnings. Operating profits are much more important than profits generated from the non-sustainable local stock market boom. What worries me in the UAE (in addition to valuations) is liquidity. IPO’s coming to the market take significant amounts of liquidity out of the market; however, the part that is most worrying is capital increases. As existing companies look to benefit from the market boom by increasing their capital through rights issues, the amount of liquidity taken out of the market, which includes significant share premiums in most instances, is where the real problem lies as tens of billions of liquidity gets pulled out of the market. The market decline could be lead by investors liquidating their holdings in listed companies and investing in rights issues and IPO’s forcing the market to decline.During the Arab Economic Forum in Beirut in June, there was a panel to discuss Arab capital markets and debate whether it was a bubble or boom. With half a dozen panelists, the views were very different. The fund managers of public equities argued that market performance is sustainable, while private equity fund managers argued that a correction is around the corner. Each one urging investors to shift to the asset class that they manage. Several reports from leading Asian and European banks have also recently come out indicating that the bubble is about to burst. As they do not manage assets in the region, and as they benefit from investors cashing out from the region and going into asset classes that they do manage, their opinions may also be biased. Although certain regional markets look expensive, including Saudi Arabia, UAE and Qatar, other still look reasonably valued, including Kuwait, Oman and Egypt. A pan Arab approach to stock market investing rather than focusing on an expensive single market would be a good way to benefit from the regional market boom while diversifying ones holdings, investing in value companies and reducing risk. In addition, working with regional professional investment managers who understand the markets and can allocate between companies, sectors and countries is advisable.

Dubai property boom survives the stock market crash

The Dubai Financial Market traded at 55% below its all-time high on the day this article was written, and started to its long fall almost exactly one year ago. Yet the local real estate market is still enjoying a boom which is stronger than ever following the recently decreed new Dubai property law.

If you turn to the emerging market business cycle model of Dr. Marc Faber, the celebrated investment guru and AME Info columnist, then a real estate bust will follow some 12 to 18 months after the peaking of a emerging stock market. However, it may be different in Dubai. In the classic model a stock market crash will drain liquidity from a market, and bankrupt stock market investors will begin to sell property at fire-sale prices and bring real estate tumbling down. This does not appear to be happening in Dubai, quite the reverse. Instead the new property law - which finally makes it 100% legal for foreigners to own real estate in Dubai - has resulted in a new inflow of cash into the market. For the time being this has more than compensated for the possible impact of the stock market crash, which is what a 55% fall in the DFM index must be termed.

Dubai remains flat as Abu Dhabi stock market drops marginally

The UAE markets showed some contrast on Monday with Abu Dhabi in modest decline and the Dubai market gaining a fraction.
On balance, this dragged the Emirates Securities general index 0.30 per cent lower to 6,040.33 at the close of trading.

The Abu Dhabi Securities Market (ADSM) general index fell 0.58 per cent to 4,785.63, while the Dubai Financial Market (DFM) index gained 0.09 per cent, closing at 5,756.93.
On the ADSM, the fall was led by construction sub-index that fell 1.65 per cent from Sunday, while energy sub-index declined 1.22 per cent.
Shares valued at more than Dh897.53 million were traded during the day on the market, with the volume of shares traded exceeding 102.82 million.

Shares of Aabar Petro-leum Investments Company were the most actively traded, while Emirates Driving Company was the day's main gainer with its shares closing 4.36 per cent higher at Dh5.50.

Fujairah Cement Industries was the main loser during the day's trading with its shares declining 10 per cent and closing at Dh7.20.
On the Dubai Financial Market, more than 168.67 million shares valued in excess of Dh973.72 million were traded. Air Arabia's shares were the most actively traded, followed by real estate major Emaar Properties.

The day's main gainer was International Financial Advisors, whose shares rose 5.93 per cent to close at Dh12.50. The day's main loser was Ware-Agility that fell 6.05 per cent at the close to Dh20.20.

UAE stock market a good buy this autumn

Local investors have been taking a nap since the crash in January, which ended the recent rally, and appear unmoved by a string of recent bullish reports from big banks like HSBC, Citi, Morgan Stanley and Goldman Sachs about the excellent outlook for profits particular in real estate and banking.

UAE investors are a little bemused by all this sudden interest in their modest stock markets. It is quite flattering to have all this attention but do these new players actually know what they are talking about? The big banks could be excused for finding local investors churlish folk. How can they be so gloomy with oil at $105 a barrel (at the time of writing) and little to suggest that booming oil revenues will come to an end anytime soon? You just need to find the right stock to lever into the oil boom and you are away. Perhaps they overestimate the sophistication of the UAE stock markets. The tomes of analysts are not generally appreciated, something far closer to the animal instincts of fear and greed is what drives this market.

How much higher can the UAE stock market go?

Over the past weeks crowds have been gathering in the UAE stock market trading floors to participate in a rapid upsurge in stock prices, and fuelling record trading volumes. This is typical of a booming economy, but how much longer can it last?

It is a cast-iron rule of investing that what goes up must go down. Emerging market economies offer many examples of capital markets that enjoy spectacular upturns that are followed by a market bust and then a very flat period or a renewed rally. This happened in Kuwait last year. Stocks more than doubled in 2003, and then suffered a correction and a rally and are presently back to an all-time high. The buyer who came into the market late last year has probably lost a little sleep, though not much money as yet. The point is that capital markets, particularly thinly traded and illiquid ones like the local markets of the GCC, are highly volatile and given to periods of irrational exuberance that dip into the wallets of late-comers. So where does the UAE market stand today? The Shuaa Capital Index has almost doubled from its all-time low from 792.35 to 1,447.58, and is up by 52% so far this year and gained 4.5% last week alone. On the other hand, if we look at the valuation of the benchmark Emnex index then we find that the high profits of local companies this year has made its mark. The price-to-earnings ratio of the quoted UAE companies is just 12 and the market is trading on a yield of 4.1%. Now given that the market was trading on a price-to-earnings ratio of 18 just a few months ago, this would seem to suggest that UAE stocks have considerable upside left in them. It could be that UAE shares match the 100% plus rise seen in Kuwait in 2003 this year. Last year in Kuwait it was a surge in optimism following the initially successful war in neighboring Iraq that sent investors into the market. In the UAE this year the combination of high oil revenues and a spate of new mega projects, most recently the tallest building in the world in Dubai and a new global financial centre, has sparked interest in UAE stocks which have also benefited from some splendid profit statements.

Dubai Financial Market to launch annual online stock trading game on March 30

A total of 30 colleges and universities are participating in the 'Online Stock Game,' which is organised by DFM. Students can take part in the game, and trade stocks and shares through the DFM's website (www.dfm.ae) during official trading hours. Every participant will have the opportunity to trade with a 'virtual' sum of up to Dhs1m. Players can then track their investments through the website and newspapers. Mubaraq Al Doosari, General Coordinator, DFM Stock Game, said: 'We are happy to bring back for 2008 DFM's 'Online Stock Game.' This game has helped thousands of students in the UAE over the past six years learn about trading stocks and making investments in financial markets. The game is an invaluable educational tool that gives students the unique opportunity to immerse themselves in the complexities of share trading, and to prepare them for a possible career in the world of business'. DFM has begun on a series of training sessions aimed at educating students about how to participate in the game. Winners will be selected based on the profits they generate during the playing period, with total cash awards of up to Dhs50,000. Students in the first category will receive Dhs15,000; those in the second category will receive Dhs10,000; and those in the third category will receive a prize of Dhs5,000. Participants ranked between fourth and 13th place will receive Dhs1,000. Female students will be eligible for additional awards. Those placed first in the category will receive Dhs3,000; those ranked second will receive Dhs2,000,;and those placed third will receive Dhs1,000. The number of participants has been increasing steadily since the launch of the game, with 357 participants in 2003, rising to 1500 participants in 2007. The number of participating educational institutions increased from 17 in 2003 to 52 in 2007.