Thursday, September 10, 2020
Gulf News - Mood turns subdued for UAE stocks, but insurance shines
Vijay Valecha, Special to Gulf News, Dated 10 Sep 2020
The UAE equity markets are subdued on account of weak economic data as well as uncertainty in the energy markets. Recently Dubai’s PMI (Purchasing Manager Index) fell to 50.9 in August from 51.7 in July, and indicated that significant job losses are hampering the economic recovery.
DFM was lower by 0.13 per cent while ADX gained rose 0.23 per cent to close the week. Equity markets in the region have been pressured by the hammering on crude prices. Current month Brent has fallen more than 13 per cent from its recent highs.
A surge in coronavirus cases across Europe, China drawing on their inventory, and the end of US summer driving season are cited as some of the reasons behind the recent weakness of prices. Nonetheless, a gradual reopening of the global economy should put a floor under prices.Strong run
Insurance companies had another good day - Dubai Islamic Insurance and Reinsurance (Aman) leaped 14.89 per cent, Dar Al Takaful was up 11.78 per cent, Aand bu Dhabi National Takaful by 14 per cent. The Islamic Arab Insurance Company (Salama) rose 4.42 per cent while Methaq Takaful closed 6.76 per cent up.
Abu Dhabi’s recent completion of a $5 billion bond offering, which includes a 50-year note, is buoying construction sector companies on hopes of further stimulus. Ras Al Khaimah Cement Company surged 7.75 per cent today.
In spite of the dour economic numbers from IHS Markit, there is a strong possibility that the worst phase is over for the UAE economy. But a lot will hinge on how soon travel opens up and trade volumes bonce back.Source :