The UAE Markets (DFM and Abu Dhabi) fell 3% plus today. Was this a reaction to fundamental factors like high proportion of one time non operating income or factors like fall in liquidity?
Or it is reaction to other Markets like Saudi or Kuwait stock markets?
Saudi Market has seen a steep fall in TASI. It was accompanied by huge selling and no buyers on almost all counters. But that has not been the case in UAE. We saw two IPOs opening at the same time drawing the liquidity. The refunds of IPOS would be 21 days from the close of issue. Till then liquidity position would be tight.
Another probable reason could be margin calls on brokers/investors forcing them to sell top traded stocks which also happen to be widely held.
Also the real estate is attracting capital which is withdrawn from stock markets.
Sitting on cash to enter the markets at each level lower than the earlier levels is a good option.
The bounce back would be in stocks which have seen steep fall since the beginning of this year.
Entering illiquid counters is also not advisable so top traded counters in banks, industry and services are attractive.
Contrarian views are welcome.
