Arabtec bounced back from days of losses with trading so intense that a market expert said it restricted trading in other Dubai shares.
The day saw Dh1.6 billion ($435 million) worth of trades in the Arabtec stock, from a total value of Dh2.6 billion ($707 million) for the whole of the Dubai Financial Market, which closed 1.1 per cent up at 5008.88 — the first time it’s closed above 5,000 since May 18.
Arabtec itself gained 9.18 per cent at Dh6.66.
“Emaar also helped the market reach 5,000,” said independent investor Adel Al Hammadi. “These two leading shares, the rise on the DFM was because of them.”
In fact, said technical analyst Osama Al Ashri, the interest in Arabtec was so great that it hampered Emaar stock trades later in the day, and left some shares untouched altogether.
“Dubai Islamic Bank trading stopped today, Emaar stopped today, because the cash went to Arabtec,” he said. “This is no good. It’s not healthy for the market. Some shares did no volume at all. Some shares you cannot sell.
“Emaar did around Dh400 million by value, 25 per cent of Arabtec. That’s not acceptable. Emaar is a very strong security and very famous.”
Emaar closed 1.5 per cent up at Dh10.15.
The impact of the Arabtec trading was so great that Al Ashri calculated new resistance levels — the point at which buying often turns to selling, leading to a levelling of prices — for the DFM.
“Now the conditions for going up have become more difficult,” he said. “The index must exceed resistance at 5,185. If it exceeds that this week or next week we can expect a new up target, but with the way traders move on property, it’s high risk.”
Much of the day’s trading went to shares that will form part of MSCI Emerging Markets index from next Sunday. Arabtec is one of them.
“But there were some of them that weren’t so strong,” Al Ashri pointed out. “Abu Dhabi banks were healthy yesterday, but not so strong today, so I don’t think it’s all related to the MSCI.
“I think it’s strong traders working on one paper, so everyone else goes for the same security. It [Arabtec] is a very, very active share. It means the market has no investors — the cash is afraid to move. That’s my opinion.”
The overall value of trades in Abu Dhabi was Dh958 million, with 40 per cent of that going to trades in Aldar, which gained 5.13 per cent to close at Dh3.90.
“If Aldar exceeds resistance at Dh4.5 before Thursday, we’ll see new up targets above Dh5,” said Al Ashri, a member of Britain’s Society of technical Analysts. “But if it goes down again and breaks Dh3.80, the risk will return. At the moment, it’s consolidating — it’s traded a huge volume without taking a direction.”
