DUBAI: UAE bourses stabilised yesterday after two days of heavy profit-taking while Qatar, supported by a hunt for high-dividend stocks, rose to a new five-year high.
The Qatari index was the strongest performer in the Gulf yesterday, rising 0.6 percent to hit a new five-year high at 10,129 points. It rose above its August peak of 10,110 points; a second straight daily close above that level would break the chart resistance and be technically bullish.
“People have been pushed away from the other parts of the region: there have been some disappointing third-quarter results in Saudi Arabia as well as the crackdown on illegal immigration, and in Dubai, which has been the darling not just of the region but of the world, there will be bouts of profit-taking,” said one senior fund manager in Doha.
“Qatar is the natural home for those taking their money off the table in those markets. Relative valuations in Qatar now look very attractive.”
Dubai’s main index gained 0.5 percent and Abu Dhabi added 0.1 percent; Dubai is up 73 percent year-to-date while Abu Dhabi sits on a gain of 44 percent.
Although both markets still have good long-term potential, some investors have been switching into high-dividend stocks ahead of the end of the year, and this triggered their drops earlier in the week, said Reda Gomaa, portfolio manager at Mashreq.
“There’s a move towards Qatar and also Saudi Arabia,” he said.
The profit-taking in the UAE may resume in coming days, partly because some investors are nervous before the decision in late November over whether Dubai will win the right to host the 2020 World Expo.
Arjuna Mahendran, chief investment officer at Emirates NBD Wealth Management, suggested in a weekly report yesterday that investors gradually book some profits in markets such as the United States, Japan and the UAE over coming weeks.
“We would sell one-third of our trading positions initially and watch whether markets can sustain their momentum.”
He added, “Much euphoria is already priced into global stock and bond markets. The UAE is no exception. With the decision on the 2020 Expo imminent, the strong performance in local markets is already factoring in a positive result. This may encourage some investors to book profits ahead of the year-end holiday season.”
Saudi Arabia’s index, which hit a five-year high on Tuesday, retreated 0.4 percent yesterday.
In Egypt, the lifting of the state of emergency failed to boost the stock index, which slid 1.3 percent as profit-taking continued after a two-month rally. Reuters
