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UAE stocks rise as Opec and allies extend oil production cuts to end of July

Dubai - Dubai Financial Market and Abu Dhabi Securities Exchange closed 4.6% and 2.37% higher, respectively.

 
Most markets in the Gulf region surged on Sunday as investors welcomed Opec+ deal to extend record production cuts until the end of July.
The Dubai's benchmark index and the Egypt's blue-chip index, both surged 4.6 per cent, led the market rally in the region on positive developments in the region to contain the coronavirus outbreak. Bahrain was the only market in the GCC, which ended in negative columns as the index fell 0.4 per cent.
The Abu Dhabi Securities Exchange's benchmark index also climbed 2.37 per cent at 4,405.32 points. The rally in the local equity markets was driven by Opec+ agreement on extending production cuts, reopening of the economy's different sectors after the lockdown and improvement in recoveries of coronavirus cases.
The Egyptian market climbed after the International Monetary Fund (IMF) announced on Friday that it had reached a staff-level agreement with Egypt for a one-year $5.2 billion standby loan to help the country to contend with the coronavirus pandemic. The agreement will be finalised by the IMF's executive board.
Analysts predict that the rally could continue as oil price is expected to stay above $40 a barrel in the coming weeks, which will help the local markets to remain steady and move upward.
In Dubai, Emaar Properties and its subsidiary Emaar Development climbed over six per cent while Emaar Malls rose 1.4 per cent. Among banking scrips, Dubai Islamic Bank rose 9.5 per cent, Emirates NBD gained 3.9 per cent and Air Arabia jumped six per cent.
In Abu Dhabi, the index was driven higher by Abu Dhabi Islamic Bank (ADIB), RAK Bank, Abu Dhabi Commercial Bank, Dana Gas and Bildco stocks. RAK Bank touched the highest upper limit of 15 per cent while ADIB rose 9.9 per cent and ADCB jumped 5.6 per cent.
Market capitalisation of the Dubai and Abu Dhabi bourses increased by Dh10.17 billion and Dh11.45 billion, respectively. While overall GCC market cap increased by $32.4 billion (Dh119 billion) on Sunday.
Bal Krishen, chairman of Century Financial, said the UAE markets started the week on a positive note as investors are expecting quick recovery in demand following the reopening of different sectors of economy and improvement in coronavirus recoveries.
"Besides, Opec+ agreement to extend production cut lifted the investor sentiments. The ongoing production cuts and reopening of global economies should continue to prop up oil prices and spur the economic recovery," added Krishen.
"Going ahead, ongoing recovery in oil prices combined with resumption of the economic activities will likely see the indices consolidating on the higher side," he added.
For the region, markets were positive last week, catching up with the global sentiments after investors returned from Eid Holidays. For the week, five out of the sevenregional indexes closed in green.
"While there are still significant uncertainties over the Covid-19 impact on corporate earnings, investors are encouraged by the reopening of economies that is likely to lead to a rebound in profitability later this year. For the region, the recovery in oil prices and further extension of record production cuts by Opec+ until the end of July will have a positive impact on domestic markets," said Iyad Abu Hweij, managing director at Allied Investments Partners.
Among other Gulf markets, Saudi Arabia's Tadawul was up 0.8 per cent, with Al Rajhi Bank rising one per cent and petrochemicals group Saudi Basic Industries up 1.1 per cent. Oil giant Saudi Aramco, meanwhile, gained 0.6 per cent.
Qatar Stock Exchange gained one per cent, Kuwait gained 0.9 per cent, Oman increased 0.6 per cent while Bahrain bucked the trend and fell 0.3 per cent.
-waheedabbas@khaleejtimes.com