Dubai Shares Advance Most in a Month on Bank Action, Wage Rise
December 04, 2011, 11:56 PM ESTBy Arif Sharif and Claudia Maedler
Dec. 4 (Bloomberg) -- Dubai’s shares rose to the highest in more than a month as global markets gained after European central banks moved to ease the region’s debt crisis and the United Arab Emirates increased wages for government employees.
Emaar Properties PJSC climbed to the highest since Aug. 29 after two bankers said Dec. 1 the developer of the world’s tallest tower agreed on an $800 million Islamic loan that costs less than its sukuk. Arabtec Holding PJSC rose 3.4 percent and Drake & Scull International rose 4.8 percent. The DFM General Index added 1.8 percent to 1,404.34 at the 2 p.m. close in Dubai, the highest since Oct. 31. Abu Dhabi’s gauge rose 1.2 percent. Egypt’s benchmark dropped 0.4 percent and Israel’s TA-25 Index lost less than 0.1 percent.
European stocks posted their biggest weekly rally in three years as central banks cut the interest rate on dollar funding and China raised cash supply for its banks to speed up growth in the world’s second-largest economy. The Stoxx Europe 600 Index jumped 8.7 percent last week, the largest such advance since November 2008. The Standard & Poor’s 500 Index surged 7.4 percent, helped by American Thanksgiving retail sales.
“There’s a follow-on from a positive lead last week that is reflecting in the market,” said Haissam Arabi, chief executive officer of Gulfmena Investments Ltd. “There’s an added bonus -- the increase in public sector wages clearly means injecting money supply into the system.”
MSCI Upgrade
The U.A.E. President Sheikh Khalifa bin Zayed Al Nahyan ordered pay increases for all federal government employees who are nationals of the country, state-run WAM news agency reported Nov. 30. The increments vary between 35 percent of basic pay to 100 percent. The president also ordered the creation of a fund valued at 10 billion dirhams ($2.72 billion) to help citizens meet loan obligations.
About 143 million shares traded today in Dubai, compared with a 12-month daily average of 101 million, according to Bloomberg data.
Dubai Financial Market PJSC’s, the Persian Gulf’s only bourse to sell shares to the public, advanced 1.6 percent to 97.2 fils, the highest since Nov. 16. Essa Kazim, the chief executive officer of the exchange, said today he doesn’t see any difficulties to the U.A.E. securing an upgrade to emerging market status at MSCI Inc. The index provider in June delayed the decision, citing among others “stringent foreign ownership limits.” MSCI will announce its decision Dec. 14.
“Investors seem to be more optimistic regarding the U.A.E.’s chances of an upgrade to emerging market status,” said Julian Bruce, Dubai-based equity sales head at EFG-Hermes Holding SAE.
First Gulf Bank PJSC climbed 5.3 percent to 15.95 dirhams. The stock has gained 11 percent since the lender controlled by Abu Dhabi’s ruling family announced Nov. 29 that it would raise foreign ownership limit to 25 percent from 15 percent.
Oil Gains
Oil capped its first gain in three weeks amid concern that tension between Iran and the West will intensify, threatening shipments from OPEC’s second-biggest crude producer. Crude oil for January delivery rose 76 cents to $100.96 a barrel on the New York Mercantile Exchange on Dec. 2, the highest settlement since Nov. 16. Prices advanced 4.3 percent last week.
Gulf Arab oil exporters, including the United Arab Emirates and Saudi Arabia, supply about a fifth of the world’s oil. Saudi Arabia’s Tadawul All Share Index rallied 1.1 percent yesterday. The measure was little changed today.
Israel Bonds
Emaar jumped 5.5 percent to 2.86 dirhams. The so-called profit rate of about 4 percent on the company’s new loan compared with a yield of 8.44 percent last week on Emaar’s Islamic bonds maturing August 2016.
Arabtec rose to 1.51 dirhams, the highest since April 24. The construction company said its newly formed facilities management unit won a contract to provide services to Cayan Investment & Development’s Silverene Towers in Dubai Marina.
Drake & Scull climbed the most in a month to 83.8 fils. The Dubai-based construction company won a contract valued at 200 million dirhams in Kuwait.
The Bloomberg GCC 200 Index gained 0.3 percent, Qatar’s QE Index increased 1.1 percent and Oman’s advanced 0.5 percent. Kuwait’s measure lost 0.1, while Bahrain’s BB All Share Index was little changed.
Israel’s benchmark bonds were little changed before a government bond auction tomorrow and a meeting between European leaders this week on the region’s debt crisis. The yield on the 5.5 percent notes due January 2022 was at 4.73 percent.
--With assistance from Zahra Hankir and Stefania Bianchi in Dubai. Editors: Shaji Mathew, Shanthy Nambiar
To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net; Claudia Maedler in Dubai at cmaedler@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
