Earnings weigh on UAE bourses

UAE shares continued their downward trend on Sunday after a series of disappointing earnings last week, with investors booking profits from recent gains.

The Dubai Financial Market fell to its lowest level in nearly three weeks, closing down 1.2 per cent at 3,447.26, while Abu Dhabi's headline index closed 0.8 per cent lower at 4,506.14.

Last week's lower-than-expected bank earnings have highlighted the effect of lower oil prices on the UAE's economy, even as crude oil prices approach their highest levels in nearly six months.

“Banks across the region are facing tightening liquidity where deposits are growing far slower than their loan books,” said Sanyalak Manibhandu, a research manager at NBAD Securities.

“Index performance so far this year has far outpaced that of earnings, so we’re now seeing indexes give up some of those gains following this most recent set of earnings.”

Mashreqbank, which last week announced an 18 per cent fall in first-quarter profit, was among the main laggers in Dubai, closing down by 7.5 per cent at Dh75.

Banks acted as the main drag on equities in Abu Dhabi, following disappointing earnings from the emirate’s largest banks. ADCB and FGB fell by 2.2 per cent and by 1.5 per cent respectively.

Saudi Arabia’s Tadawul All-Share Index fell by 0.7 per cent, despite shares in Saudi Arabian Mining, known as Ma’aden, closing up nearly 10 per cent. The company is considered to be one of the main beneficiaries of the country’s attempts to diversify its economy.

Meanwhile, UAE markets will be closed on Thursday on account of Leilat Al Meiraj.

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