Abu Dhabi Stock Market Makes Biggest Monthly Gain In 5 Years

Banks help Abu Dhabi’s index end higher as the benchmark makes its largest monthly gain in more than five years, while Dubai hits a 37-month high.

Bank shares rallied ahead of earnings and some extend gains after Abu Dhabi Commercial Bank posted a 32-per cent jump in quarterly profit and proposed a 25-per cent cash dividend for 2012.

ADCB shares rise 2.9 per cent to their highest close since late 2008.

National Bank of Abu Dhabi slips 0.5 per cent, trimming January’s gains to 6.3 per cent. The lender on Tuesday posted a 55-per cent rise in fourth-quarter profit, beating analysts’ forecasts.

“These numbers are a big change for UAE banks – a turning point,” says Ali Adou, portfolio manager at The National Investor. “We saw them spend the last three years cleaning their balance sheet and focusing on asset quality. We’re in a phase where banks won’t be concerned about improving asset quality.”

Other financial stocks also rally, with Abu Dhabi Islamic Bank up 0.9 per cent and Union National Bank climbing 1.6 per cent.

Abu Dhabi’s index rises 1.1 per cent to end at 2,882 points. The market is up 9.5 per cent in January, its biggest monthly gain since October 2007.

Dubai’s builder Arabtec jumps 5.7 per cent to a six-month high.

Bluechip Emaar Properties slips 0.2 per cent, trimming the month’s gains to 29.9 per cent. The developer has been the main driver for Dubai’s bourse in recent months as investors bet it would benefit from a tentative recovery in Dubai’s property market.

After market hours, Emaar posted a 28-per cent drop in fourth-quarter net profit, missing analysts’ forecasts as costs soared amid a revival of stalled projects.

Dubai’s measure rises 0.7 per cent to 1,888 points, its highest finish since December 2009 to extend January gains to 16.3 per cent.