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Markets on Recovery Path

DFM main index added 1.61 per cent to 1,463.94, while ADX inched up 0.64 per cent to 2,213.63

DUBAI — Property stocks buoyed UAE shares on Tuesday paced by Arabtec Holding which surged 14.6 per cent after posting a hefty 77per cent jump in its net profit last year.

The Dubai Financial Market’s main index added 1.61 per cent to 1,463.94. The Abu Dhabi Securities Exchange benchmark index inched up 0.64 percent to 2,213.63.

“The markets appear to be on the road to more sustainable recovery after big losses in recent weeks,” said P. Krishnamurthy, CEO of Dubai International Securities, adding some investors are beginning to accumulate stocks with very attractive valuations.

He said investors have digested earnings reports and concluded that the numbers “weren’t too bad” considering that global economic activity hit the skids in the second half of last year.

“No stock has drastically exceeded expectations and likewise no stock

has reported as bad as their current stock price suggested,” said Matthew Wakeman, managing director of cash and equity linked trading at EFG-Hermes. “If anything, rather than disappointing investors, they have served to put a near-term bottom in place and helped investors to make more informed investment decisions.”

Arabtec, the country’s largest construction firm which is expected to finish building the world’s tallest tower in Dubai in the third quarter, said on Monday it had solid book orders until 2011 and was eyeing expansion in Qatar and Saudi Arabia.

Arabtec shares which have plunged 60 per cent since January on a string of setbacks on its projects, added Dh1.02 or 14.6 per cent.

“Arabtec is regaining buying interest at these levels after yesterday’s results were good enough to highlight how oversold the stock is,” said Wakeman.

Property stocks in both bourses advanced more than 5 per cent.

Dubai index mover Emaar Properties, the region’s largest property developer which is expected to shortly announce its results, rose 4.81 per cent to Dh1.96. Deyaar Development climbed 4.16 per cent to Dh1.02 while Union Properties edged up 5.35 per cent to Dh0.59.

In Abu Dhabi, Aldar Properties advanced 6.54 per cent to Dh2.35 after the company said it will shift its focus to mid-range property development. Sorouh Real Estate rose 5.09 per cent to Dh2.37. Banks remain under pressure in Abu Dhabi as investors shifted to real estate stocks. The biggest losers were Investbank which fell 10 per cent to Dh2.35 and Bank of Sharjah which dropped 8.03 per cent to Dh1.24.

Bigger banks were not spared as First Gulf Bank shed 3.12 per cent to Dh7.61 while Abu Dhabi Commercial Bank retreated 2.68 per cent to Dh1.46.

The slide in banks will only be for the near-term said Krishnamurthy.

“There will be new liquidity coming in place and this will eventually benefit banks which can start lending again. This new stimulus will help restore confidence in the markets.”

The Abu Dhabi government recently said it will inject more liquidity into banks to boost economic activity.

· rocel@khaleejtimes.com