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UAE Shares Extend Winning Streak on Recovery Hopes

Real estate heavyweights paced gainers, with Dubai index mover Emaar Properties adding 2.3 per cent to Dh4.43, while Abu Dhabi property market leader Aldar Properties, rose by 
4.9 per cent to Dh5.78.

In early trading, investors cheered US stocks’ rising to their best finish this year on Monday, amid hopes low interest rates will spur a year-end rally in global equities. There was also some residual buying on reassurances byHis Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai in the previous session, that Dubai had weathered the worst of the financial storm.

However, momentum fizzled out toward the close, capping gains of the Dubai Financial Market to 0.7 per cent at 2,169.72. The benchmark index of the Abu Dhabi Securities Exchange also gained by a marginal 0.7 per cent at 2,970.10. Volumes though were higher in both bourses compared to the previous session, it was 75 per cent higher in Dubai, and 50 per cent higher
 in Abu Dhabi.

“We will have the odd few days when we will detach from global market trends, but for this we need domestic news flow and that is thin on the ground right now,” said Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG-Hermes.

Dubai Financial Market PJSC, the only listed stock market operator in the Gulf offering shares to the public, rose by 2.2 per cent to Dh2.33. Arabtec Holding, the country’s biggest construction company, inched up by 1.3 per cent to Dh3.23. Shuaa Capital, UAE’s largest investment bank, edged up by 2.2 per cent to Dh1.90.

In Abu Dhabi, oil and power producer Abu Dhabi National Energy Company or Taqa, stretched gains for a second session on speculation ahead of its earnings results on Wednesday, surging by 5.1 per cent to Dh1.44. Waha Capital PJSC climbed by 4.4 per cent to Dh0.94. Sorouh Real Estate, the emirate’s second largest property company, advanced by 2.2 per cent to Dh3.29.

“We are seeing steady accumulation of stocks after recent corrections, investors are trying to build a new base for a stronger rally before the end of the year,” said Mohammed Ali Yasin, chief executive of Shuaa Securities.

Yasin said that while mixed third quarter results proved that previous rallies were not justified, sentiment in both bourses, especially Dubai, continues to be positive, bolstered by reassurances by Shaikh Maktoum that the emirate’s second bond offering of $10 billion will 
be well-received.

“Statements like that are very important to boost sentiment, it leaves no room for doubt that recovery in Dubai is in place, but investors are also looking at today’s prices, which are still 
quite attractive.”

Investment bank EFG-Hermes said on Monday the equities markets in the Middle East and North Africa will continue to pick up pace for the rest of the year and into 2010, buoyed by improving global sentiment, while sustained domestic fiscal stimulus that is expected to support earnings growth.

“Fund flows are still positive, with emerging market funds still holding significant cash positions. MENA markets are trading at a discount to MSCI emerging markets and developed markets, but earnings growth looks more secure, thanks to strong government stimulus packages,” said EFG-Hermes.

Shuaa Securities’ Yasin said Dubai shares are also being driven by the re-entry of foreign institutional investors.

“With worry about UAE’s economy easing, foreign funds are stepping back into the market. This is also reducing the volatility that we have seen last week.”

rocel@khaleejtimes.com