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DFM Gains on Speculation that Recent Drop is Overdone

DUBAI — Dubai’s index gained the most in more than three weeks, leading Gulf markets higher, on investor speculation that declines this month are overdone given growth prospects.

Emaar Properties PJSC, the United Arab Emitate’s biggest developer, added the most since January 3. Emirates NBD PJSC, a Dubai-government controlled lender, increased the most in a week.

The DFM General Index rose 2.6 per cent, the most since January 3 and the biggest fluctuation among global equity markets tracked by Bloomberg News, to 1,611.31 at 1:16 p.m. in Dubai.

The measure closed at the lowest since December 9 yesterday.

Declines of 11 per cent this month have left the 32 companies in Dubai’s benchmark index valued at about 5.1 times estimated earnings, data compiled by Bloomberg show.

That compares with 12.8 times for the MSCI Emerging Markets Index.

Dubai’s 14-day relative strength index closed yesterday at 29.

A reading below 30 indicates a security is poised to gain, according to some technical analysts.

“Dubai is almost back to the December lows, which seems a bit excessive,” said Rabih Sultani, a fund manager at Duet Mena Ltd. in Dubai. “With global markets and crude selling off, we don’t expect a sustainable recovery in Dubai until more clarity is given on Dubai World’s restructuring plan.”

European stocks fell for a fourth day, the longest losing streak in two months, after US shares plunged the most since October and Ericsson AB reported disappointing earnings. Asian equities also declined.