Emaar buyback fails to cheer markets

Dubai: Emaar's share buyback announcement on Saturday failed to lift investor sentiment on the Dubai Financial Market, which yesterday ended in negative sentiment, after rising in early trade.

The Abu Dhabi index declined as well, dragged down by real estate, telecom, banking and energy stocks.
The Dubai Financial Market General Index shed 3.38 per cent to close at 4,114.78. Declines in property, banking and utility stocks weighed on the market. Of the 29 stocks traded, 23 declined and three advanced.
The Abu Dhabi Securities Exchange benchmark closed 2.71 per cent lower to end at 3,925.08. Twenty-nine stocks declined, seven advanced and three remained flat.

The Dubai market opened higher on the buyback news. Emaar shares climbed to a high of Dh8.03. However, the stock could not sustain itself at higher levels and fell to a low of Dh7.31 on selling pressure. It closed slightly up at Dh7.34. The stock has slumped close to 50 per cent this year.

"The news of buyback, which could not hold the selling pressure, created more panic in the market and we witnessed selling all over in every counter," said Shiv Prakash, equity investment analyst at Mac Sharaf Securities.
The announcement, welcomed by most fund managers and analysts yesterday, has to be implemented this time to have the desired affect on the market.

Emaar has twice before made applications for buybacks, but did not go for it.
"Investors think that Emaar will buy and are hopeful," said Haissam Arabi, managing director, asset management, Shuaa Capital.

"But, more importantly, they will have to wait until they actually buy it for people to realise it on the floor - that they [Emaar] are buying before they start reacting actively."

The all too familiar phenomenon of Gulf Cooperation Council market contagion - Saudi Arabia down more than four per cent on Saturday, and Qatar more than six per cent and others too in the red - did their bit to damage UAE markets, which reported higher trading volumes.
Volume on the DFM increased 59 per cent to 329.34 million shares with trading value expanding 56 per cent to Dh1.37 billion.

"We were expecting a recovery early morning, but if the other GCC markets are down, chances are that we are going to turn around again," Arabi said.

With negative sentiment surrounding the ongoing corruption cases and the possibility of a slowdown, real estate and related stocks continue to be mauled.

Big losers
Union Properties, Arab-tec, Deyaar Development, Tamweel, and Dubai Islamic Bank on DFM shed 8.41 per cent, 11.25 per cent, 4.88 per cent, 10.04 per cent and 5.47 per cent respectively.
On ADX, Aldar Properties, the most liquid stock of the day trading a total value of Dh173.23 million, slipped 3.47 per cent and Sorouh Real Estate slid 3.84 per cent. etisalat lost 4.24 per cent to close at Dh15.80.

Last week, foreigners continued to be net sellers on DFM, disposing Dh2.47 billion worth of shares.
"And what is happening in the markets has been going for weeks with a breed of opportunistic hedge funds that are playing us and we are like sitting ducks.

"And, unfortunately, retail is panicking and no other smart money coming in," Arabi added.