Etisalat shares rose on the first day of trading by foreign investors on the back of record volumes.
The telco’s shares were up 3.5 per cent at the opening bell yesterday, before paring gains to close up just 1.7 per cent at Dh14.50.
Some 42.3 million Etisalat shares changed hands on ts busiest day ever, with more shares trading than on the previous 17 trading days combined.
But analysts were disappointed by the level of gains.
“The volumes were good but the price increase was lower than what everyone was expecting,” said Khaldoun Jaradat, a trading manager at Brokerage House Securities in Dubai.
“I suspect that foreigners with big money are going to wait until the price is a bit more attractive before coming in.”
Etisalat shares have risen by 21 per cent in value since the decision to open the stock to foreign investors was announced on June 22.
“Active investors aren’t going to pay to own a stock just because it’s available if its not at a price point that’s right for them,” said Julian Bruce, the head of institutional trading at EFG-Hermes in Dubai.
“The stock needs to reprice a bit to become more attractive. Its dividend is good, and it’s an attractive telco stock in comparison with regional peers, but it has to represent a proper value proposition.”
Mr Bruce said that the company's shares may drift lower in the short term, but that there would be some uptick in the run-up to MSCI's index review in mid-November, which may result in Etisalat being included in the provider's widely tracked Emerging Market Index.
Data from the Abu Dhabi Securities Exchange implied that non-Emirati ownership of the stock stood at 0.7 per cent of its total share capital at the end of trading yesterday. However, one broker who asked not to be named suggested that the total foreign ownership was closer to 0.5 per cent.
A spokesman for the ADX declined to comment.
Etisalat led gains on an otherwise sluggish day for Abu Dhabi’s stock market. The capital’s headline share index rose by 0.42 per cent to 4,505.61.
ADCB and Aldar Properties were among the other main gainers, rising by 1.7 per cent and 1.2 per cent, respectively.
Shares in Dubai snapped a three-day losing streak, thanks to gains by Emaar Properties, DIB and Damac.
The Dubai Financial Market General Index rose by 0.6 per cent to 3,533.95.
Other markets across the GCC ended the day in the red. Bahrain led losses for the day, closing off 1.3 per cent.
Saudi Arabia’s Tadawul, the region’s largest stock market, was about 1.2 per cent lower in early trading, before rallying to end the day down just 0.03 per cent.
Global stocks were choppy in the run-up to today’s meeting of the US Federal Reserve open market committee, which may result in an announcement tomorrow of the first rise in US interest rates since 2008.
Asian markets posted mixed performances after China’s Shanghai Composite plunged 3.5 per cent. Hong Kong’s Hang Seng index finished off 0.3 per cent, while the Nikkei and South Korea’s Kospi ended up 0.3 per cent and 0.5 per cent, respectively.
European indexes ended the day slightly higher, while the Dow Jones Industrial Average opened up 0.9 per cent.
jeverington@thenational.ae
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