A pullback on global markets has given local short-term investors, who dominate trade in the absence of institutional investors, a sell signal.
Emaar falls 0.6 percent and Aramex drops 1.7 percent as losers outnumber gainers five to zero.
“There’s money going back into Egypt and Qatar and to some extent Saudi Arabia, but UAE is bottom of international investors list in terms of the MENA region,” says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
“Money is coming into regional stocks, but it is very selective and based on news flows — foreign investors are not just blanket buying the large caps and hoping the indexes will go up. They are doing their homework.”
Wakeman says UAE stocks will eventually entice foreign investors as a catch-up play if other markets extend gains, but for now, there are too many doubts surrounding the UAE economy.
“Until we get more (Dubai World) debt restructuring and some other question marks out of the way, we won’t see a massive return of investors to the market,” Wakeman adds.
In September, creditor banks will deliver their response to Dubai World’s $14.4 billion debt restructuring offer, while Nakheel’s creditors are expected to give their feedback on the developer’s separate restructuring plan by the end of August.
Saudi Telecom Co. (STC) slumped to a four-week low on Wednesday after the Kingdom’s regulator confirmed BlackBerry Messenger would be banned.
The Tadawul All-Share Index (TASI) closed with a very minor loss of 0.9 points at 6300.44 points; down -0.01 percent. The sector activity for the day was mixed with eight gaining sectors and seven losing sectors.
The gain for the day ranged from 0.02 percent by the building and construction sector to 0.66 percent by the energy and utilities sector. On the other hand, the loss ranged from -0.08 percent by the petrochemical industries sector to -1.57 percent by the media and publishing sector.
The overall market breadth for the day was also positive with 53 advancers against 63 decliners giving it an AD ratio of 0.84, the Financial Transaction House said its daily market commentary.
State-owned Saudi Arabian Mining Co. (Maaden) rose 0.3 percent, edging toward this week’s three-month high.
The company’s shares are up 17 percent since July 7, when it said a phosphate plant should be operational in the fourth quarter, earlier than expected.
Abu Dhabi’s benchmark edges up 0.01 percent to 2,537 points as only one of the four active stocks move. Waha Capital climbs 1.5 percent and accounts for nearly three-quarters of all shares traded.
Dubai’s index fell for a fourth session in five.
“Until we get more (Dubai World) debt restructuring and some other question marks out of the way, we won’t see a massive return of investors to the market,” EFG’s Wakeman added. Commercial Bank of Qatar (CBQ) climbed 1 percent to a 12-week high, extending gains since reporting above-forecast quarterly earnings.
— With input from agencies
