With thousands of food packages delivered, the company has not only provided sustenance but also a sense of hope to those facing the adversity of natural calamity
The broad-based buying paced by real estate stocks, which jumped 14.18 per cent, sent the DFM benchmark index to its highest close since November 17 at 1,652.98. The Abu Dhabi Securities Exchange Index posted marginal gains of 1.06 per cent at 2,298.65.
The $20-billion bond plan helped eased worries that the emirate, reeling from piling debts estimated at $70 billion to $80 billion, will not be able to refinance its debts this year.
“The main message is, Dubai has the means to service its debt obligations, and that at the federal level there is a willingness to assist Dubai with its funding obligations,” said Ali Khan, managing director of Arqaam Capital.
“This is the long awaited support that the market has been expecting Dubai to get from the federation,” said Rami Sidani, head of investments of Middle East and North Africa at Schroder Investment Management.
“The market has been pricing in an economic bankruptcy, an assumption far from reality, mostly due to the lack of knowledge of international investors on the strong relationship any emirate, and especially Dubai, enjoys with the federation.”
Index heavyweight Emaar Properties jumped 14.81 per cent to Dh2.17, recovering its losses on Sunday after its US unit filed for bankruptcy protection.
Emaar issued a statement to the Dubai bourse on Monday saying it did not expect any further impact on its first quarter results as a result of the bankruptcy of its John Laing Homes.
“This is a good opportunity for Emaar’s US unit to reorganise and hopefully emerge from Chapter 11 as a more focused and profitable entity,” said Matthew Wakeman, managing director of cash and equity linked trading at EFG Hermes.
The Dubai Financial Market PJSC, which controls the stock exchange, posted its best finish in five months, surging 14.84 per cent to Dh1.47.
Arabtec Holding, the country’s largest construction company building the world’s tallest tower in Dubai, chalked up 14.7 per cent to Dh1.95.
Deyaar Development added 11.76 per cent to Dh0.57 while Union Properties surged 13.33 per cent to Dh0.85.
Property stocks in debt-ridden Dubai are among the hardest hit sectors as the global financial crisis put the brakes on the booming sector. Slumping oil prices, which largely fuelled the strong growth of the property market in the last five years, aggravated the downturn.
This year Dubai’s mostly government-run corporate will need to refinance about $15 billion of $70 billion in debts, said Moody’s Investors Service previously.
“The package is a clear statement of support by the federal government. While 2009 will be a difficult year for Dubai, it will be insulated from the worst effects of the global financial crisis,” said Simon Williams, chief economist at HSBC Holdings Plc in Dubai.
“The federal government gave a strong sign that it is prepared to take steps necessary to restore stability in the UAE markets,” he said. Among Dubai banks, the Dubai Islamic Bank gained 13.21 per cent to Dh1.97.
In Abu Dhabi, the Bank of Sharjah rose 9.37 per cent to Dh1.40. The Abu Dhabi Islamic Bank climbed 5.15 per cent to Dh2.98. The Abu Dhabi Commercial Bank added 5.3 per cent to Dh1.62. Aldar Properties edged up 6.03 per cent to Dh2.55.
The bond issuance is a big step in terms of restoring confidence in Dubai’s financial system, said R.M. Raghu, senior vice-president for research at Kuwait Financial Centre.
With thousands of food packages delivered, the company has not only provided sustenance but also a sense of hope to those facing the adversity of natural calamity
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