Oversold Dubai stocks may see turnaround by September quarter

DUBAI, Jan 20 (Gulf News): The Dubai index may witness a turnaround in the third quarter of 2019, but current levels are not good enough to initiate a buy, analysts say.

The Dubai Financial Market (DFM) general index has been one of the most oversold in the region, shedding a quarter of its value last year.

The index has been flat in the first three weeks in January.

"I'm bearish in the short-term; the Dubai index is trading in a low-risk area for traders as it is oversold. The index may form a new low below 2,500/2,417 by next month before going up," Osama Al Ashry, a technical analyst based in Abu Dhabi, said.

He expects the index to hit 2,720/3,025 by the third quarter.

Most of the stocks had been beaten down due to excessive selling, amid pressure from calls for margin. Emaar Properties has shed 39 per cent over the past one year.

"Margin calls have been triggered in stocks like Gulf Finance House, Emaar Properties, pushing them below fair value. I think they will fall more than 10 per cent, and they could be a good buy from there," Al Ashry said.

Emaar Properties, which has the highest weightage on the index, closed 0.50 per cent higher at Dh4.02.

Emaar Properties may record a new low of Dh3.78 before going up to Dh5.80 in the third quarter by 2019, and GFH may rise to Dh1.37 by the end of third quarter, he said.