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Dubai Index In Biggest Gain In 8 Months, Property Leads Rebound

Dubai Index In Biggest Gain In 8 Months, Property Leads Rebound

The measure is now up 43.9 per cent this year and has tripled since the start of 2013.

Property-related stocks led gains as Dubai’s index rallied from a six-week intraday low in its largest one-day advance since mid-September on Wednesday, while Egypt eased from a 69-month peak.

Dubai’s benchmark rose 4.2 per cent. It had lost 12.6 per cent in the previous five sessions and fell a further 2.4 per cent intraday before rebounding. The measure is now up 43.9 per cent this year and has tripled since the start of 2013.

“The sell-off was expected but exaggerated – the decline in the prices on many of the heavyweight stocks increased investors’ appetite to buy on dips,” said Firass Yaish, business development manager at One Financial Markets in Dubai.

“Volatility is still the name of the game and we need to keep in check the rising PE (price to earnings ratios) of most of the stocks listed on the DFM (Dubai Financial Market).”

Builder Arabtec climbed three per cent, Union Properties jumped 7.7 per cent, Emaar Properties rose 2.5 per cent and developer Deyaar added 5.4 per cent.

This quartet, a favourite for day traders and speculators, accounted for about two-thirds of all shares changing hands on the index.

Abu Dhabi climbed 1.7 per cent, rallying from Tuesday’s two-month low.

“Q1 numbers have been very strong from a lot of (UAE) heavyweights, in banking and real estate,” said a Dubai-based equity sales director.

“The performance over the past year was very aggressive, although volatility did increase over the last month, which was a sign that a correction was imminent.”

Egypt’s main share index slipped 0.4 per cent to ease from a 69-month high, although late buying pulled many stocks into positive territory and as many rose as fell.

The bourse has been buoyant since Saudi Arabia, Kuwait and the United Arab Emirates promised billions of dollars in loans and donations to Egypt after the army deposed Islamist President Mohamed Mursi last year.

Earlier this month, the head of Egypt’s national oil company said Gulf oil producers had given his country free fuel totalling $6 billion. The aid helps reduce the costs of state fuel subsidies and the drain on foreign exchange reserves.

“This gives the government breathing room to take steps regarding subsidies and tax collection,” said the sales director. “The news flow about international companies moving forward with their investment plans and adding capacity is another positive sign.”

Citadel Capital dropped 1.5 per cent and Pioneers Holding fell 1.3 per cent.

“Egypt stocks never got that cheap, even during the most stressful times – the opportunity if the people running the country get things even half right is still massive and companies will benefit,” added the director.

Saudi Arabia’s measure rose 0.4 per cent, while Qatar, Kuwait and Oman all made minor losses.


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