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Equities Advance on Rising Oil

The benchmark index of the Dubai Financial Market edged up 3.6 per cent higher at 2,077.08, paced by property stocks which jumped by 5.2 per cent. Union Properties which lagged in the recent market rallies, surged nearly 14 per cent to Dh1.15.

The main index of the Abu Dhabi Securities Exchange added 1.8 per cent at 2,838.75. Index mover Emaar Properties, the Middle East’s biggest property developer, surged 4.5 per cent to Dh3.93. Arabtec Holding, the country’s largest construction company, chalked up gains of 6.2 per cent at Dh3.08. The company is reportedly bidding for projects worth Dh22 billion.

Analysts said crude oil prices moving past $70 a barrel boosted investor confidence, not only in the UAE but in other markets across the region as well. Crude oil went up by as much as $71.65 a barrel on the New York Mercantile Exchange on reports of a drop in US oil inventory, while a weaker dollar prompted investors to seek more attractive investments.

“Positive leads such as oil prices going up and the real estate sector downturn showing signs of recovery, with banks resuming lending, will push the markets higher, especially property stocks which make up a huge chunk of the stock portfolio,” said Ali Khan, managing director of Arqaam Capital Limited.

Deyaar Development added 4.7 per cent at Dh0.89. Construction and engineering company Drake & Scull International gained 2.2 per cent at Dh0.92.

Phone company Emirates Integrated Telecommunications Co or du, the UAE’s second biggest telecommunications firm, went up by 4.9 per cent to Dh2.97. The company’s futures contracts were delisted on Wednesday at the Nasdaq Dubai due to foreign ownership restrictions.

The Dubai bourse has gained 7.2 per cent so far this week and is unlikely to stay at the support level of 2,000, analysts said.

“If Dubai maintains its highs this week, its challenge is sustaining that level and going up even higher next week,” said Haissam Arabi, chief executive officer and fund manager of Gulfmena Alternative Investments.

“Investors are still very bullish despite the fact that the markets should be in a correction phase, but they are proving to be very resilient. If the markets move up today, it confirms this positive sentiment and barring any negative leads, markets will continue their uptrend next week.”

Banks in Dubai also advanced with Emirates NBD, the country’s biggest bank by assets, rising by 3.9 per cent to Dh3.75. Dubai Islamic Bank was 3.6 per cent higher at Dh2.90.

In Abu Dhabi, property and energy stocks led gainers. Property market leader Aldar Properties, added 3.9 per cent at Dh4.72. Second-ranked Sorouh Real Estate was up by 2.4 per cent to Dh1.29. The smaller RAK Properties added 4 per cent at Dh0.79.

Rising oil prices pushed Dana Gas higher by 4.4 per cent at Dh1.18. TAQA or Abu Dhabi National Energy Company rose by 1.7 per cent to Dh1.83.

Investors also shrugged off a downgrade in the ratings of three banks in Abu Dhabi by Citigroup. First Gulf Bank which is controlled by the Abu Dhabi ruling company, edged up 3.2 per cent to Dh13.05. The bank was downgraded to a “hold” from “buy as the economic slump could prolong the credit cycle downturn. Abu Dhabi Commercial Bank, rose 2.5 per cent to Dh2.11, the bank’s rating was cut to “sell” from “buy.” National Bank of Abu Dhabi edged up 1.6 per cent to Dh9.97, its rating was cut to “hold” from “buy.”— rocel@khaleejtimes.com