July 3 (Bloomberg) -- Dubai’s shares climbed the most in more than three months, pacing gains in the Middle East, as investor appetite for riskier assets increased after Greece passed an austerity package to avoid default.
Emaar Properties PJSC, developer of the world’s tallest skyscraper in Dubai, jumped 3.6 percent and Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, advanced to the highest in almost two weeks. Dubai’s DFM General Index rose 2.4 percent, the most since March 20, to 1,553.31 at the 2 p.m. close in the emirate. Abu Dhabi’s ADX General Index climbed 0.2 percent and the Bloomberg GCC 200 Index added 0.3 percent. Israel’s measure surged 2.4 percent in Tel Aviv.
“The marginal regional investor, providers of incremental liquidity, have for many months now looked at global markets for cues, so the strong global close last week certainly helped,” said Sachin Mohindra, a fund manager at Invest AD in Abu Dhabi. “High net worth regional investors will continue to take cues from global markets in the next few months.”
U.S. and European stocks rose last week after Greek Prime Minister George Papandreou on June 29 clinched enough votes to pass the first part of a five-year austerity plan aimed at meeting European Union aid requirements and staving off default for his debt-laden nation. Lawmakers backed a bill on June 30 to authorize the measure.
U.S. stocks posted the biggest weekly rally since July 2009. The Standard & Poor’s 500 Index soared 5.6 percent last week, while the Dow Jones Industrial Average advanced 5.4 percent. The MSCI Emerging Markets Index rallied 3.7 percent.
“Valuations in key Gulf Cooperation Council stocks look attractive relative to underlying growth, and I expect long-term investors to closely track second-quarter results to firm up buying decisions,” Invest AD’s Mohindra said.
A decline of 4.7 percent this year has left the 31 companies on Dubai’s benchmark index valued at about 8.5 times estimated earnings, data compiled by Bloomberg show. That compares with 11.1 times for the MSCI Emerging Markets Index.
Emaar rose the most since May 10 to 3.13 dirhams and Emirates NBD increased 2.4 percent to 4.25 dirhams, the highest level since June 20. Tamweel PJSC, the home finance company majority owned by Dubai Islamic Bank PJSC, rallied 3.4 percent to 88 fils. The stock was included in the DFM General Index and the banking sub-index.
Qatar’s QE Index advanced 1.4 percent, Oman’s MSM30 Index gained 0.3 percent and Saudi Arabia’s Tadawul All Share Index added 0.1 percent. Kuwait’s SE Price Index retreated 0.6 percent and Bahrain’s gauge slipped 0.2 percent. In North Africa, Egypt’s EGX 30 Index advanced 0.9 percent.
In Israel, the TA-25 Index rallied the most since May 10 to 1,252.91. The yield on the 5 percent Mimshal Shiklit government bonds due January 2020 gained three basis points, or 0.03 percentage point, to 5.19 percent.
--Editor: Shanthy Nambiar, Shaji Mathew
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