Return from Dubai equities remains on solid ground

Arun Leslie John, Khaleej Times, April 3, 2025

The Dubai Financial Market general index provided a total return of 65 per cent over the past three years.

The Dubai Financial Market (DFM) general index provided a total return of 65 per cent over the past three years, data from Bloomberg Index Functions showed, outweighing all its peers by a considerable margin.

In line with the bearish trend prevailing in global markets, the DFM General Index recorded its first decline in ten months and the largest drop among GCC markets in March, falling by 4.2 per cent to close at 5,096.24 points. This decline brought the index’s year-to-date performance for 2025 to -1.2 per cent, data from Kamco Invest showed.

Sectoral performance was largely negative, with seven out of eight sector indices posting declines, while only one sector recorded a gain. The financial index registered the steepest drop at 7.6 per cent, followed closely by the consumer discretionary index, which fell 7.3 per cent during the month. The financial index’s decline was driven by several double-digit losses, including a 20.8 per cent drop of shares of National International Holding and a 12.6 per cent decrease in Ekttitab.

National International Holding also reported a decline in net profit, falling from $7.5 million in FY-2023 to $5.3 million in FY-2024. Additionally, all three constituent companies in the consumer discretionary index recorded losses during March. In contrast, the materials index posted the only and largest gain of 29.8 per cent, closing at 175.8 points, primarily driven by a nearly identical 29.8 per cent increase in the National Cement Company’s share price.

“The declines in March for the DFM index were primarily due to major selling seen in index heavyweights Emirates NBD and Emaar Development. For both Emirates NBD (- 4.25 per cent decline for March) & Emaar Development (- 5 per cent decline for March), the selling came as investors looked to reduce their positions amidst the ongoing market volatility. These stocks correspond to the high beta, high alpha real estate and banking sectors. In the case of Emirates NBD, the recent earnings have pointed to an increase in overall expenditure amidst a slowdown in non-interest income. Investors often look at stabilisation and growth from this segment, especially during times of falling interest rate expectations,” Arun Leslie John - Chief Market Analyst at Century Financial, told Khaleej Times.

According to the monthly stock performance from Bloomberg, National Cement Co topped the monthly gainers table with a 29.8 per cent jump in share price followed by National General Insurance and Dubai Refreshments Company with gains of 28.7 per cent and 20.7 per cent, respectively. National Cement Company recorded strong financial results for the 2024 fiscal year which reached Dh134.9 million recording 120 per cent annual growth in operating profits reflecting strong real construction sector demand. On the decliner’s side, National International Holding topped the table with a decline of 20.8 per cent followed by shares of Ekttitab Holding Company and Mashreq Bank which recorded declines of 12.6 per cent and 12.5 per cent, respectively, during March.

Trading activity on the exchange witnessed a strong decline during March. Total volume traded declined by 21.4 per cent to reach 3.6 billion shares as compared to 4.6 billion shares during February. Similarly, the total value of shares traded during the month declined at a relatively similar pace of 21.3 per cent to reach Dh11.3 billion in March as compared to Dh14.8 billion during February. Union Properties topped the monthly volumes traded chart recording 620.3 million shares which changed hands during the month followed by Drake & Scull International and Talabat Holding PLC which saw 538.4 million and 287.9 million of their shares change hands during the month, respectively.

On the monthly value traded chart, Emaar Properties topped the list with Dh3.5 billion worth of shares changing hands during the month, followed by Emaar Development, and Dubai Islamic Bank which saw Dh1.4 billion and Dh1.1 billion value of their shares traded, respectively.

In Abu Dhabi, the FTSE ADX Index recorded its second consecutive monthly decline in March, with a fall of two per cent. The index closed the month at 9,368.81 points, bringing its year-to-date performance for 2025 to –0.5 per cent. Sectoral performance on the exchange was predominantly negative, with eight out of 10 sector indices posting declines, while only two registered gains. The consumer discretionary index experienced the steepest decline, dropping 8.2 per cent to 4,957.9 points, as all eight constituent companies in the sector saw declines, led by a 10.1 per cent decrease in Emirates Driving Company’s share price. The basic materials index followed closely, falling 8.0 per cent to 4,437.0 points, largely driven by share price declines of 9.4 per cent in Fertiglobe and 7.6 per cent in Borouge. Fertiglobe reported a sharp decline in net earnings, from $348.9 million in FY-2023 to $159.9 million in FY-2024. The utilities index recorded the highest gain, rising 15.5 per cent, driven solely by the performance of Abu Dhabi National Energy Co., the sector’s only constituent, which posted an identical 15.5 per cent increase in share value for the month.

In the wider GCC, the MSCI GCC index also witnessed a marginal decline of 0.4 per cent during the month despite a broad-based decline across the seven exchanges in the region. Equity markets across the globe remained under pressure for the second consecutive month during March after uncertainty related to US trade policies and a forecasted slowdown in the US economy affected investor sentiments.

While the Dubai real estate story remains in play, markets are now anticipating a bit of a cool-off in prices, with price growth expected to be near low double digits for this year. “Non-performance from Dewa and Salik also meant no anchor support from the utility names. In the overall context of the Gulf markets, while Dubai continues to be the preferred choice for global investors owing to its diversified nature of economy base and rising consumption population, more profit booking cannot be ruled as investors look to book some gains made during the index’s previous three-year rally,” John said.

Source

Khaleej Times