Investors’ hopes for positive news from Dubai builder Arabtec may help the emirate’s bourse gain further on Wednesday after it rebounded strongly in the last session.
The Dubai index jumped 3.2 per cent on Tuesday as Arabtec, which had plunged its 10 per cent daily limit early in the session, surged to close up 10.3 per cent. After the close Arabtec, Dubai’s most heavily traded stock and the main catalyst behind the market’s 22 per cent drop last month, said it would address questions and rumours about it at a briefing on Wednesday at 1400 local time (1000 GMT), after the day’s trading ends.
Market players said Arabtec’s jump was at least partly due to rumours that a government-related entity might buy the 28.85 per cent stake owned by its former chief executive, who resigned unexpectedly last month.
Other Dubai stocks have started looking attractive from a valuation perspective after their pull-back. At the market’s peak in May, many names traded above analysts’ consensus target prices, but they are now back below the targets.
Qatar, which together with the United Arab emirates went through a cycle of speculation and profit-taking as index compiler MSCI upgraded both countries to emerging market status at the end of May, also rebounded on Tuesday, jumping 5.6 per cent.
The Qatari index has confirmed support at the 11,400-point level in the past three days and closed on Tuesday near its intra-day high, which was technically bullish.
Qatari companies are usually the first ones in the Gulf to start reporting quarterly earnings and will begin publishing them next week, so some investors may continue taking positions in the market.
In Egypt, the market may react negatively after the country’s president approved a law on Tuesday imposing a new 10 per cent tax on capital gains and stock dividends – although the move was already partly priced in when the tax was first announced earlier this year.