Complex Made Simple

Bargain hunters arrive too late at shattered Dubai market

The DFM General Index lost another 7.27 per cent on Tuesday, December 16, closing at 3,083.69 points as Brent crude oil prices fell for the first time since 2009 below $60 per barrel. This level represents the lowest point since December 11, 2013.

The gauge was temporarily down by more than 8 per cent, but a few daredevil bargain hunters sent Ajmanbank and Air Arabia up by 14.55 per cent and by 0.72 per cent, respectively. For the first time this year, market bellwether Emaar Properties hit a limit down, closing ten per cent lower at AED6.12. Other shares hitting the limit down were Drake and Scull International, Gulf General Investment Company (GGICO) and Union Properties.

With this week’s trading action so far, the gauge has shaved the second support level at its 38.2 per cent correction (Fibonacci retracement) since its 2014-high at 5,331 points.

Asked about investors’ behaviour amid the market crash, Fathi Ben Grira, the CEO of brokerage firm MENA Corp told by email earlier in the day that brokerage accounts which were leveraged were mechanically being sold due to margin call procedures following the drop of market valuation. “However, we see numerous accounts where investors chose to bring more cash to maintain their position,” he added.

Gérard Al-Fil