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.