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Dubai Shares Rise to Five-month High

DUBAI - UAE shares on Thursday capped the week on a positive note, with stable oil prices propping up index heavyweights in both Dubai and Abu Dhabi.

Emaar Properties and Emirates NBD helped pushed the Dubai Financial Market benchmark index to end 1.6 per cent higher at 1,791.77, its best finish since it ended at 1,802.77 on December 21. The index gained 7.5 per cent from the previous trading week. The Abu Dhabi Securities Exchange main index inched up 0.6 per cent to 2,659.01, adding 1.7 per cent from last week.

“Oil holding on to a $60 a barrel handle is key for our markets next week, and the trading session in Saudi on Saturday will set the tone for us on Sunday,” said Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG-Hermes. “Our markets have formed a firm base, and any re-tests of year lows is looking increasingly unlikely given that markets overshot to the downside and are now edging higher off a low base.”

“It is hard to say if the worst is over. We can still expect some volatility in the markets, as we are definitely not out of the woods yet. Markets here move in line with global developments, but we shouldn’t be re-testing previous lows anymore,” said Rami Sidani, head of Middle East & North Africa at Schroders Investment Management.

Improving investor sentiment should also encourage more buying, said Samer Al Jaouni, general manager of Middle East Financial Brokerage.

An investor sentiment survey conducted by Shuaa Capital showed that investors are more optimistic this month than they were in April about where the UAE economy is heading, with 43.7 per cent expecting conditions to improve during the next six months. Shuaa said that by comparison, only 34.2 per cent of investors polled in April said they expected recovery to happen within six months. Regional investors too were more upbeat about economies in the Gulf, with the May GCC investor confidence index rising by 7.8 points to 119.4 from 111.6 in April, according to the survey.

“Confidence is building up in the markets especially since key resistance levels are being breached by some index movers. This should be positive for the market going forward, even as we will only have a clearer picture of where companies stand in the third quarter,” Al Jaouni said.

Shares in Emaar rose by 2.7 per cent to Dh3.15, pushing its gains for this week to 21. 7 per cent. Arabtec Holding added 1.5 per cent to close at Dh2.67. Deyaar Development rose by 1.5 per cent to Dh0.66, while Union Properties was up by 2.6 per cent at Dh0.78.

Shuaa Capital surged by 14.6 per cent to Dh1.65, accumulating gains of 43.9 per cent in three trading sessions. Emirates NBD advanced by 4.1 per cent to Dh3.28 after disclosing on Wednesday that is was in talks to raise extra capital.

· rocel@khaleejtimes.com