Dubai index at 6-month high despite slump


Dubai’s benchmark rose 1.8 percent to hit a new six-month closing high – its eighth straight rise. Trading volumes topped 1 billion shares for the third time this week and only the fourth occasion since July 1, 2008.

Oman rose 0.6 percent to 5,719 points, its highest close since December 22.

US and Asian stocks fell before Gulf markets opened, dragged lower by disappointing US employment data. A weak dollar helped oil recoup its early losses to climb above $ 67 a barrel, but below Tuesday’s seven-month high of $ 69.05.

Speaking about Dubai, Rami Sidani, Schroders Middle East head of investment said: “There has been a strong inflow of international funds, and foreign trading as a percentage of the market is close to the level of before the crisis.

“Large local institutions have been sitting on a lot of cash and have now been encouraged to come back in.”

Property developer Deyaar was the most active stock, accounting for more than a sixth of all index trading, and it jumped 11.3 percent after saying it would hand over four projects in June.

Dubai Financial Market extended its gains to 43 percent since May 25 as investors expect rising trading volumes to translate into bigger profits. Credit Suisse raised its outlook on the stock to ‘outperform’ and almost doubled the price target to Dh2.2. It closed at Dh1.96.

“We are seeing major re-pricing in Dubai after it fell to exaggerated levels,” said Sidani. “This is mostly led by an improvement in risk appetite (among) … domestic and international investors.”

Declines on global markets overnight and early morning dampened sentiment on other Gulf Arab bourses, hitting volumes.

Abu Dhabi and Oman trading slumped by more than a third, while volumes on the Kuwait and Qatar markets suffered double-digit declines.

Dubai escaped the trend with volumes rising 28 percent from Wednesday, as did Bahrain.

Qatar’s index fell 0.9 percent as investors cashed in some of this week’s 12 percent surge.

Kuwait was almost unchanged, slipping 0.01 percent, and Abu Dhabi retreated from Wednesday’s 28-week high, but most analysts say yesterday’s losses are unlikely to be the start of a correction in the short-term. Egypt’s index climbed 1.1 percent.

The UAE’s two main markets were expected to keep their upward momentum into next week.

“I expect our (UAE) markets to continue upwards next week but at a slower pace than we saw in the week just passed,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

“Large caps look set to lead due to their integral part of the UAE economy and the benefit they will derive from resurgence in growth.”


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