[2008-09-24]  UAE shares fall as jittery investors offload holdings
Stock markets in Dubai and Abu Dhabi fell on Tuesday as worried investors continued to sell off stocks amid growing doubts around the world about the US governments rescue package of buying bad mortgage debts. Asian markets closed down on Tuesday and Wall Street also suffered losses on Monday.

The Dubai Financial Market General Index fell 150 points, or 3.56 per cent, yesterday. The index closed at 4,051.02. Of 26 stocks which traded, 24 declined and two increased. The two-day loss for the market was 6.1 per cent, closing in on reversing the Sunday gain. Abu Dhabi shares edged down 2.84 per cent to close at 3,900.32. Twenty-nine stocks declined, five advanced and one ended flat. Volumes and turnover in both markets also declined. While in Dubai, volume dropped 41 per cent to 262.62 million shares, in Abu Dhabi, it tumbled 59 per cent to 104.99 million shares. Value of traded shares on DFM declined 39 per cent to Dh1.09 billion and on the Abu Dhabi Securities Exchange, it fell 61 per cent to Dh585.86 million.

The Abu Dhabi Securities Exchange Index dropped after two days of gains and Dubai extended its loss for the second straight day after it had gained 9.87 per cent on Sunday. "The rally we saw in the market on Sunday was for the most part a relief rally and a lot of short positions were squeezed out," said Khalid Masri, executive partner, Rasmala Investments. "That would explain the high volumes seen on Sunday. The DFM and ADX are currently experiencing an almost one-to-one correlation with global markets and todays losses can be entirely explained by the losses in Wall Street last night and Asian markets this morning." Profit-booking by short term traders, mostly local, continued in both bourses. EFG-Hermes daily stock market report said that in Dubai, Arab and foreign investors were net buyers and local and GCC investors were net sellers. In Abu Dhabi, it was the same for buyers and local investors were net sellers. And it was across the board - real estate, construction, banking and investment, energy, transportation, telecommunications, and utilities.

"Profit-booking after a sharp rise was seen in both markets," said Shiv Prakash, equity investment analyst, technical at Mac Sharaf Securities. On ADX, selling was seen from those investors who were waiting for a rise to close there long positions which led to the fall yesterday." Cues from the global markets will continue to impact the investor sentiments in the region and in the country, analysts feel.

"Sentiment is very fragile and we will continue to trade in tandem with global markets over the next few days at least," Masri said. Prakash agreed, saying that the market mood was bearish and they are following international markets as the previous rise was also seen on that account.


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