The Dubai Financial Market (DFM) moved in a narrow range yesterday before closing higher following marginal buying of selected stocks. The general index added 1.08 per cent, or 22.27 points, to end the session at 2,093.16 points compared with the previous close of 2,070.89.

"It's not a rebound, the index is only reacting to the previous session's decrease," senior financial analyst Wadah Al Taha told Emirates Business. "We don't regard this one per cent gain as a rebound because the market closed below 2,100, indicating an underlying weakness of the market. This trading doesn't reflect any fundamental factors."

Telecoms led the other sectors with a 4.18 per cent gain and was followed by utilities, which recorded a 2.38 per cent rise. The finance and investment, realty and transport sectors all rose by more than one per cent.

Market heavyweight Emaar moved up marginally by 0.73 per cent to close at Dh4.16. The property major recorded trading of 22.28 million shares.

"Significant pressure has built up on Emaar ever since it touched Dh4.55," added Al Taha.

"From this level the market started to lose ground because of Emaar's continuous fall."

Twenty-two stocks advanced, two declined and five remained unchanged.

The losers were Dubai National Insurance and Re-insurance (DNIR) and Emirates NBD. DNIR shed 0.87 per cent and closed at Dh2.29, while Emirates NBD fell 0.43 per cent to end the day at Dh4.60.

The top gainers on the bourse were Global, Al Madina, Ekttitab, Gulf Finance House and Deyaar.

Among the banking stocks, Ajman Bank, Al Salam Bank-Bahrain, Dubai Islamic Bank and Gulf Finance House closed higher.

Ajman Bank rose 0.99 per cent to close at Dh1.02. Al Salam Bank-Bahrain added 1.94 per cent and closed at Dh1.05, while Dubai Islamic Bank stock gained 1.88 per cent and closed at Dh2.71.

Telecom major du added 4.18 per cent and closed at Dh3.24, while transport stocks Air Arabia and Aramex moved up.

The Sharjah-based low-budget carrier's shares rose 1.96 per cent to end at Dh1.04.

Aramex stock moved up 1.74 per cent and closed at Dh1.75, while Gulf Navigation stock ended flat at Dh0.70.

The real estate sector, led by Deyaar and Drake and Scull International (DSI), supported the index as none of the stocks declined.

Arabtec added 0.99 per cent to close at Dh3.07. Deyaar shares added 4.35 per cent to close at Dh0.72 and DSI stock moved up 3.06 per cent and ended at Dh1.01.

Union Properties closed flat at Dh0.92 after the stock recorded trading value of Dh4.6 million and volume of five million shares. The stock has been active with several factors affecting trading.

The property major said it planned to borrow Dh1 billion from Emirates NBD, which has a 48 per cent stake in the company, to complete outstanding projects.

The company is averaging default payments of 15 per cent on pipeline properties.

UPP is also reportedly in talks to sell its 50 per cent stake in Emirates District Cooling, which would return up to Dh250m of cash.

Ian Munro, Research Head at MAC Capital Advisors, said: "We continue to rate UPP as a speculative property play, with outstanding funding concerns, projects mostly in second tier locations and potential for further receivable and inventory write-downs during Q4-2009. That said, the price is likely to fluctuate back above the physiological Dh1 mark on price catalysts, including the potential Emicool stake sale, possible Index Tower unit sales to DIFC – due for completion in Q210 – sales from its nine million square foot land bank and developments on loan restructuring and funding."

UPP has decided against issuing an additional Dh2.5bn bond, following the recent restructuring of Dh2.75bn worth of syndicated loans. UPP also expects recurring revenues from its leasing portfolio to double to Dh500m from FY-10 onwards.


Turnover drops 19% ahead of holidays

The DFM recorded another session of bleak trading volumes yesterday as turnover dropped by 19.15 per cent.

The trading value stood at Dh278.4 million against Dh344.4m on Tuesday, Dh345.4m on Monday and Dh281.3m on Sunday. The volume was also relatively low as 163.5 million shares were traded in 3,717 deals.

"Investors gave up trading as they were caught between optimism and pessimism," said said Wadah Al Taha.

"Key factors such as the hesitant psychology of investors and a lack of confidence in the future direction of the market have further weakened sentiment. Recently guessing the bargain spread and buying a certain number of shares has become the common way of trading."

Ian Munro said: "The UAE markets continued the trend of weakening on light volumes yesterday, with the low volumes placing downward pressure on valuations. The Asian markets were flat with oil trading below $75.98 per barrel, contributing to another weak session on the bourses."

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.