Our macro strategist, Mohamad Al Hajj, believes there could be selling pressure in the UAE today from enlarged margin positions. We saw a decent uptick in margin activity in the UAE in 4Q16 and YTD this has been concentrated in names such as GFH, Eshraq, Arabtec among others. Big losses from Arabtec and Eshraq announced this week drove a sharp correction in both names yesterday (down 10% each), and we believe that they could see continued negative sentiment given margin positions. This could potentially extend to the rest of the market. ADX data shows that selling on Eshraq from margin accounts stood at 50% of total volumes week-to-date (21% on a net selling basis). Margin levels are high in the UAE at USD2.6bn. Abu Dhabi Exchange (ADX) and Dubai Financial Market (DFM) margin reports put the value of shares in margin accounts at USD2.6bn (of which USD1.8bn on DFM). This is a sharp increase from the USD1.4bn value when the weekly data started on 19 November 2015. We have one historical data on margin levels on DFM pre-November 2015, this goes back to 21 May 2014 when Arabtec’s market cap stood at USD9bn. At the time DFM margin levels stood at USD1.4bn, still below today's levels, which were substantially boosted by GFH to a large extent.   We note that the Top 25 names by value of margin level to market cap (i.e. USD value of shares in margin accounts / USD market cap) in the UAE were down c4.3% on average yesterday, while names with lower margin levels were down only c1% on average.  (Mohamad Al Hajj, ADX, DFM)