84.97 billion dirhams, Dubai Financial’s gains in 3 months

The Dubai Financial Market ended the transactions of the second quarter of this year with the best quarterly performance, benefiting from the strength of the national economy and the momentum of gains achieved by leading stocks, in addition to the increased demand from institutions and international investors, thus continuing the momentum it witnessed over the past year.

During the second quarter of this year, the Dubai Financial Market index rose by 9.59%, or the equivalent of 521.17 points, to close trading at the level of 5955.58 points, compared to 5434.41 points in the last trading sessions in the first quarter of this year (last March 31), supporting almost collective growth of sectors.

The market capitalization of Dubai Financial rose from 896.67 billion dirhams in the last sessions of last March, to 981.64 billion dirhams at the end of yesterday’s session (the last session of last June), bringing the market capitalization to approximately 84.97 billion dirhams.

The market performance, during the period from April to last June, supported an almost unanimous growth in the stocks of the main sectors, most notably the industrial sector, which rose by 20.11%, the banking sector by 5.55%, in addition to the real estate sector, which recorded a growth of 2.34%.

While the public utilities sector rose by 3.76%, the communications sector by 14%, luxury consumer goods by 46.17%, and basic consumer goods by 6.38%.

During the second quarter, national investors in the Dubai Financial Market tended to purchase with a net investment of 2.29 billion dirhams, after recording purchases worth 31.49 billion dirhams, compared to sales worth 29.2 billion dirhams.

Shares listed on the Dubai Financial Market attracted liquidity exceeding 58.5 billion dirhams, after trading about 16.44 billion shares and executing 1.13 million transactions.

In the Abu Dhabi Securities Market, the General Market Index (FADGI) rose in the second quarter of this year by 2.97%, closing at 9,804.16 points, achieving the largest quarterly gains in a year.

The market capitalization of the “Abu Dhabi Market” rose from 2.77 trillion dirhams in the last sessions of last March, to 2.88 trillion dirhams at the end of yesterday’s session (the last session of last June), bringing the market capitalization to approximately 109.69 billion dirhams.

Shares listed on the Abu Dhabi Market attracted liquidity exceeding 81.58 billion dirhams, after trading about 27.06 billion shares and executing 1.71 million transactions.

For his part, Raed Diab, Senior Vice President of Research and Investment Strategies Department at Kamco Invest, confirmed that “the performance of the UAE markets during the second quarter was positive and distinguished, especially in the Dubai Financial Market, where the market recorded a recovery of about 9.5%, while the Abu Dhabi Securities Market achieved growth of about 3%.”

He added that the positive performance in the UAE markets was supported by the decline in geopolitical tensions and reaching some understandings during the recent period, which contributed to enhancing investor confidence and raising the level of investment appetite, in addition to increasing the demand for seizing opportunities available in the market.

He expected that political developments would play a pivotal role in the performance of markets during the second half of the year, explaining that the continued state of stability in the region, in addition to reaching sustainable solutions to geopolitical disputes, would reflect positively on local and foreign investment flows.

He added that reopening shipping lanes and stabilizing supply chains would enhance the attractiveness of the region’s markets, including the UAE markets, and support the continued flow of Gulf and foreign investments.

He explained that investors are currently awaiting the companies’ results for the first half of the year to evaluate their performance, in light of the recent geopolitical developments, pointing out that any impacts on some economic activities are considered within the normal context of global conditions during that period.

He expected the third quarter of this year to witness better performance if the geopolitical calm continues, noting that current market valuations are still attractive and provide good investment opportunities in both Dubai and Abu Dhabi.

In turn, a member of the National Advisory Council at the Chartered Institute for Securities and Investment, Wadah Al-Taha, said, “The UAE markets have shown clear flexibility in dealing with these pressures and absorbing the impact of risks in the indicators.”

He pointed out that the financial results for the first half of the year may contribute to supporting the performance of a number of leading stocks, which will reflect positively on the movement of indices during the coming period.

He pointed out that the Dubai market enjoys clear investment attractiveness, noting that the profitability ratio at the end of May was about 9.1 times, which is the lowest among the markets of the Gulf Cooperation Council countries, compared to an average of about 16.3 times, which reflects attractive investment opportunities in the market, in light of the strength of the UAE economy.

He added that the impact of external factors on the UAE and Gulf markets remained relatively limited, and even appeared positive in some periods, expecting the positive performance to continue during the second half of the year, with a gradual improvement in the third quarter.

Al-Taha expected a gradual return to initial public offerings, which would contribute to increasing the depth of the market and enhancing its attractiveness.

. Dubai Financial shares attracted 58.5 billion dirhams in liquidity in the second quarter.