Bourses Continue Rally, Driven by Realty Stocks

DUBAI — Dubai shares kept their rising trend for a second consecutive day as rising oil prices and improving regional and global sentiment boosted buyers’ confidence, mainly in property stocks.

By Abdul Basit

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Published: Mon 24 Aug 2009, 11:38 PM

Last updated: Sun 5 Apr 2015, 9:33 PM

Emaar Properties, the UAE’s largest developer, advanced 4.3 per cent, Arabtec climbed 3.4 per cent and Union Properties rose 4.6 per cent.

“Gulf markets are reacting to gains in oil and global markets over the weekend and the rise on the Saudi index on Saturday,” Samer Al Jaouni, General Manager of Middle East Financial Brokerage Company, said.

There’s not enough news locally to move prices, so global stocks are driving our markets,” Al Jaouni said.

Dubai’s benchmark stock index rises 2.5 per cent to 1,858 points, its biggest gain since last Tuesday. In Abu Dhabi, the ADX added one per cent to 2,826 points. “This is a huge reversal,” said Akram Annous, Deputy Fund Manager at Al Mal Capital, citing oil prices of about $65 a barrel a week ago. “Investors are buying on the fact that last Monday, the concept was that markets were going to collapse, but then the US flipped its nose up and turned things around.”

Oil, which surged 1.9 per cent to $73.89 a barrel, and the Standard & Poor’s 500 Index, which also climbed 1.9 per cent, were at their highest levels since October after the US existing-home sales in July increased more than expected.

The rise in oil prices from a December low of $32.40 has helped Gulf markets bounce back from the worst financial crisis since the 1930s, pushing Saudi Arabia’s and Dubai’s indexes up 19 and 13 per cent respectively this year,. The six nations of the Gulf Co-operation Council together supply about 20 per cent of the world’s oil.

A likely restructuring of Dubai-based Nakheel’s $3.5 billion sukuk maturing on December 14 will be taken positively if the Dubai government underwrites it, EFG Hermes said in a note. “The impact of a restructuring of the Nakheel sukuk on Nakheel, and more broadly, on Dubai, would depend on the terms associated with the restructuring,” it said.

Property stocks were among the biggest gainers on a resurgent Abu Dhabi bourse, although a region-wide rally may prove short-lived if positive global sentiment falters. Aldar Properties and Sorouh Real Estate climbed 5.9 and 5.6 per cent respectively, while RAK Properties, the benchmark’s most traded stock, added 2.8 per cent.

With inputs from agencies

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