Stocks Rally as Govt Commits More Cash

DUBAI - The Dubai stock market leapt almost 11 per cent on Tuesday to post its biggest one-day gain ever for the second trading session in a row while Abu Dhabi shares rallied 7.53 per cent as the government committed more funds for the banking system to protect it from any adverse impact of the global financial crisis.

By Issac John

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Thu 16 Oct 2008, 12:51 AM

Last updated: Sun 5 Apr 2015, 7:32 PM

Led by real estate stocks, Dubai Financial Market (DFM) General Index ended at 3,703 points with trading volumes surging to a three-month high of Dh2.2 billion. The Abu Dhabi Securities Exchange (ADX) General Index rose to 3,602 points with transactions totalling Dh711 million.

Tuesday’s rally came after the UAE said it had made another Dh70 billion available for local banks as part of measures to combat possible liquidity problems. On September 22, the UAE Central Bank set up a Dh50 billion facility to help banks cope with the crisis. On Sunday, the government said it would guarantee deposits and savings in local banks to protect depositors in face of the global financial turmoil.

Following the latest move, real estate stocks led the gains - buoyed by upbeat local investors - with Emaar Properties and Union Properties ending 14.92 per cent higher at Dh6.78 and 14.61 per cent up at Dh2.51 respectively.

Analysts said the rally reflected upbeat investor sentiments following strong government initiatives to back up the banking and financial sector. For the past two days, 90 per cent of the stocks traded on DFM and ADX touched the circuit breaker levels within 30 minutes from the start of trading sessions. “There has been a significant improvement in sentiment worldwide, and that’s being reflected in our markets as well,” Ali Khan, head of equity trading at Arqaam Capital told Bloomberg.

“Now with the Government’s promise being delivered and around Dh120 billion being pumped into the financial sector, investors are upbeat and optimistic about the market. But they need to be wary of over spending and not repeat past mistakes. We have already witnessed certain amount of perkiness among investors today and with the news flowing in; tomorrow will be an exciting day,” one analyst at Al Dhafra Financial Broker LLC said.

“Foreign investors were net sellers even today, but not in large volumes. The real support came from the GCC and local investors and institutions,” said an analyst with Dubai International Securities. “However, what was common for both markets was that there were no sellers at both counters in the last trading hour of the day, an indication that they expect the rally to sustain in the coming days.”

Recent losses mean Emaar Properties is now Dubai’s third-largest company by market capitalisation, with Mashreq Bank and Emirates NBD taking over the first two spots. Construction firm Arabtec and mortgage lenders Tamweel and Amlak Finance all soared around 15 per cent.

In Abu Dhabi, Etisalat was the top gainer of the day, ending 9.8 per cent higher, but property stocks and banks also featured heavily among the bourse’s biggest winners.

Dubai Islamic Bank soared 15 per cent to Dh5.94, bringing the two-day surge to 32 per cent. National Bank of Abu Dhabi, the UAE’s second-biggest lender by assets, added 9.8 per cent to close at Dh12.3.

issacjohn@khaleejtimes.com


More news from