Dubai was the headline gainer, rising 2.7 percent to claw back some of the previous day’s losses after the emirate’s ruler appointed board members for a support fund that will manage a $ 20bn bond programme to aid cash-starved state-linked firms.
“This reinforces that things are coming together in terms of dispersing funds and so I’m sure that will prompt regional and international liquidity to participate in the market,” said Ali Khan, managing director and head of brokerage at Arqaam Capital.
Dubai launched the second tranche of its government bond programme in July. The first $ 10bn tranche was sold to the United Arab Emirates central bank. Real estate-related stocks were Dubai’s biggest gainers, with Emaar Properties and Arabtec both adding more than 5 percent.
“Interest is coming back into real estate stocks in the UAE,” said Ahmad Shahin, Shuaa Capital equities strategist. “People are assuming the worst is over and that real estate prices have bottomed out, and that has been driving stocks higher, but we’ve yet to see any signs of this.”
Zain-linked companies lifted Kuwait’s index, which rose 0.8 percent, as investors bet on a possible stake sale in the mobile operator, but many other blue chips fell. Zain will hold a shareholders meeting on Aug. 31 that some analysts say could pave the way for a rival to buy a stake in the telecoms operator.
Zain climbed 3.1 percent while Kuwait Food Co, Gulf Cable and Electrical Industries Co and National Investments Co all added more than 5 percent. The conglomerate Mohamed Abdulmohsin Al Kharafi & Sons is a major shareholder in all four companies.
“Investors are taking bets on Zain being sold soon,” said Talal Al Loghani, Vice President for Gulf equity markets at Kuwait Finance and Investment Co.
“Kuwait has been underperforming the other Gulf markets this year and so I think investors might come in to try and help it catch up.”
Kuwait’s index is up 1.8 percent this year, making it the second-worst performing regional index in 2009. Top gainer Saudi Arabia is up 21.7 percent.
Asian stocks and commodities rose yesterday, tracking gains in US markets overnight, after the Federal Reserve said it saw stability in the US economy, spurring investors to buy back shares and other riskier assets and sell US dollars.
A weaker greenback is seen as positive for regional equities, because it makes them relatively cheaper for international institutions, with five of the six Gulf Arab currencies pegged to the dollar.
Oil was up 1.8 percent at $ 71.44 a barrel at 1145GMT, building on Wednesday’s gain, which ended a four-session losing streak.
“Rising oil prices will draw more cash into Gulf markets,” said Amjad Bakir, Mac Sharaf Securities trading manager. Abu Dhabi’s benchmark made its largest gain for a month, rising 1.6 percent to its highest close since June 15.
Aldar Properties added 5 percent and Abu Dhabi National Energy Co (Taqa) 6.8 percent.
The latter reported a 71 percent drop in second-quarter profit year-on-year.
“Taqa’s profit was significantly lower than our forecast, but it was up 240 percent quarter-on-quarter and investors have taken this as a positive, which is reflected in its share price movement today,” added Shuaa’s Shahin.
Saudi Arabia’s bourse is closed on Thursdays.
