The UAE stock markets are likely to see an upward trend and hit significant levels ahead of firms’ announcement of their financial results.
By the end of Wednesday’s trading session, the stock markets faced a wave of profit-taking and the Dubai Financial Market General Index (DFMGI) dipped 0.12%, while the Abu Dhabi General Index (ADI) slipped 0.29%.
Anticipated record of gains
The UAE bourses have seen a wave of profit-taking on Wednesday’s session, which is normal after stocks jumped over the last eight sessions, CEO of MindCraft Consultants Fadi El Ghattis told Mubasher.
Firms’ announcement of annual financial statements is likely to lead stocks towards a record of gains, El Ghattis forecast.
Investors’ optimism since the beginning of this year may push the Emirati indices to hit record highs, he said.
Annual financial statements and cash dividend distributions may contribute to boosting the DFMGI above 3,730 points, which may make it able to reach 4,020 points afterward, he added.
Moreover, Raed Diab, Vice President of Investment Research Department in KAMCO, said that the current general performance of the UAE bourses seems positive, in line with the thriving economic situation in the country.
The focus will be shifted towards the financial results and dividends of major firms, particularly Emaar Properties, Diab noted.
Furthermore, CEO of NamaaZone Iyad Aref said that the DFM has resistance at 3,505 points, while it has support at 3,450 and 3,405 points.
Optimism dominates investors as indices hit attractive levels, Aref stressed, pointing out that the UAE stock markets are projected to see a temporal wave of profit-taking to maintain the upward trend afterward.
Diversification of financial instruments
The administration of the DFM’s effort to activate short-selling will positively impact the UAE bourses, market analyst Ziad Al-Qamizi told Mubahser.
Al-Qamizi projected that short-selling would positively boost liquidity and provide new options for investors.
Traders are likely to use this instrument to achieve profits due to lower prices, he said, adding that institutional or individual investors would consider short-selling on the long term to hedge and reduce risks.