Doha/DUBAI: Qatar Exchange rose back above the psychologically important level of 10,000 points for the first time since August yesterday.
It ended at 10,046.57 points or 0.71 percent to 70.74 points from the previous closing of 9,975.83 points on Sunday.
The volume of the shares were up to 14,676,780 from 13,982,933 on Sunday and the value of shares increased to QR472,713,191.71 from QR218,997,685.28 on Sunday.
Dubai’s main stock index dropped 2.8 percent to its lowest level since early October, as a lack of fresh catalysts prompted investors to take profits and selling snowballed with valuations at relatively high levels.
The market has soared this year — and is still up 79 percent year-to-date — as Dubai’s property market has recovered from its 2008-2010 crash and investors have speculated about the benefits if Dubai wins its bid to host the 2020 World Expo.
That has left valuations temporarily stretched according to some fund managers; a survey of 16 leading Middle East-based investment institutions at the end of last month found 25 percent expected to decrease their UAE equity allocations in the next three months and 25 percent to increase them.
On Monday, 19 out of the index’s 32 constituent stocks declined and only three rose, as the index suffered its biggest percentage decline since early September.
“We think this is some kind of sell-off, which was to be expected,” said Marwan Shurrab, fund manager and head of trading at Vision Investments. “Some people are just trying to reduce their risk exposure.”
Ali Adou, portfolio manager at The National Investor, said: “The market has rallied strongly for the past one month and I think we have to take a bit of a breather and see a bit of correction.
“From the fundamental perspective the market is a bit stretched for the time being, and the Expo is already priced in.” A decision on which city will host the Expo 2020 is due in late November.
Investors hope a win by Dubai would boost economic growth in the emirate and provide fresh orders for its construction sector, but it is not clear how much of the benefits would flow to listed companies or whether their valuations should reflect such a distant event.
The Dubai index, which closed at 2,823 points yesterday, broke initial chart support on the early October peak of 2,860 points. The next underlying support is on the August peak of 2,762 points; stronger support lies around the 100-day average, now at 2,598 points.
Abu Dhabi was dragged down by Dubai but dropped only 0.9 percent, a sign that it is viewed as less richly valued.
Egypt’s bourse extended a profit-taking wave which started on Sunday, although at a slower pace. The index fell 0.5 percent yesterday after sliding 0.9 percent on the previous day.
The index, which closed at 6,324 points, is still up 41 percent from its late June low in a rally fuelled by the ouster of former president Mohammed Mursi. Immediate technical support lies around 6,200 points, which was a ceiling in late October.
Kuwait’s index declined 0.7 percent. Fouad Alhadlaq, deputy general manager at Al Dar Asset Management in Kuwait said many local companies had put off earnings reports until this week, the last week they are permitted under regulations, leaving investors waiting on the sidelines.
“The market is now anticipating a huge flow of last-minute board meetings that will come up with third-quarter results.”
Kuwait’s No.1 telecommunications operator Zain reported a fifth straight decline in quarterly profit after the market closed, largely because of foreign exchange moves.
QNA/Reuters
