By: Mahmoud Gamal
Dubai – Mubasher: The UAE’s twin bourses are able to face current challenges after hitting the lowest level last week due to the global markets plunge, analysts told Mubasher.
The local stock markets are expected to see a sideways-to-declining trend in Sunday’s trading session until the general performance of the global markets becomes clear on Monday, CEO of MindCraft Consultants Fadi Al Ghattis said.
The UAE bourses still have the potential to resume the upward trend as price/earnings ratio could hit lowest, which makes it attractive and different from the US stocks that price/earnings ratio reached high levels and need for a strong correction, Al Ghattis added.
He indicated that foreign investors are still holding onto their stocks in the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) as they prefer them among the region's bourses amid the country’s economic stability.
The robust expectation of listed-firms quarterly financial results, as well as the UAE’s solid economy, are likely to boost the local stock markets again, he said.
The Emirati stocks, particularly banks, are the best in the Middle East for investment due to the hike in interest rates and the possibility of increasing their weight in the global indices, Al Ghattis highlighted.
For his part, CEO of Al Safwa Mubasher Financial Services Ehab Rashad projected that further disclosures of companies’ quarterly results will attract liquidity to the markets.
He added that the efforts currently being sought by regulators as part of initiatives to launch a platform for small- and medium-sized enterprises (SMEs) and to establish new companies are key factors that pave the way for a positive performance in the markets in the coming period.
Global investment banks are forecasting the correction movement at the emerging markets to end soon, which will lure further foreign investments to the GCC stock markets, Rashad noted.
The increase in oil prices will attract heavy liquidity that helps the markets to revive, he said, pointing out that this will consequently impact the financial results of listed-companies for the fourth quarter.
Translated by: Mai Ezz El-Din
