The UAE markets may rise in December on the back of new catalysts when stocks reach attractive levels, in line with the anticipation of a thriving economy.
In November, the Dubai Financial Market General Index (DFMGI) dropped 5.93% to 3,420.17 points and the Abu Dhabi Securities Exchange (ADX) fell 4.2% to 4,283.07 points.
The UAE bourses are likely to rebound after the completion of the initial public offerings’ (IPOs) period in December, vice president of the Investment Research Department in KAMCO Raed Diab told Mubasher.
The recent oil prices, which followed the decision of the OPEC and non-OPEC producers on output extension curbs until the end of 2018, are one of the main factors that bolster the markets during monthly trading, Diab noted.
Numerous stocks have touched low levels, which may encourage accumulations during December, he pointed out.
The UAE’s economy is still strong and diversified, which lure more foreign investments, Diab stressed.
Technical analyst at the African Economic Council Mona Mostafa said that the Central Bank of the United Arab Emirate’s governor had previously stated that the UAE bourses’ various economic catalysts boost the UAE economy towards the target growth rates.
The recent IPOs are one of the factors that attract investments, in addition to the powerful financials of most listed-firms in the third-quarter of 2017 and improved oil prices, Mostafa added.
The markets have suffered from the lack of liquidity as traders were concerned and pessimism controlled them due to the political situation in Saudi Arabia, the analyst noted.
The bearish performance is fading away since the last week of November as the markets are seeing sideways trend, Mostafa said.
The DFMGI has witnessed a downward trend during November, testing support below 3,540 points, she highlighted.
She further noted that investors have remarkably resumed leaning on buying on the back of the positive local news.
The index has a potential support downturn near 2,870 and 3,200 points if it fell below 3,380 points, which might be a stop-loss point, she added.
The index may rebound as part of the current sideways wave to target 3,670 and 3,545 points, she said, pointing out that this scenario might carry on until the end of this year.
Moreover, she forecast the ADX to maintain the sideways trend over the rest sessions of 2017.
The ADX may experience high volatile wave in the first half of December in an attempt to recover and break support near 4,360 points.
Essam Kassabia, financial analyst at Menacorp Financial Services said that the markets are likely to be negatively impacted by the current situation in the region, mainly in Yemen.
It is worth mentioning that Yemen’s former president Ali Abdullah Saleh has been killed yesterday amid fighting between his forces and Houthi rebels.