Feb. 21 (Bloomberg) -- Abu Dhabi’s shares rose to the highest in almost five months after Emirates Telecommunications Corp. proposed a dividend for 2011 and on investor bets the sheikhdom’s spending plans will support real-estate companies.
Emirates Telecommunications, the United Arab Emirates’ biggest phone company known as Etisalat, jumped the most this month. Sorouh Real Estate Co., the emirate’s second-largest developer, advanced 1.8 percent. Abu Dhabi’s ADX General Index rose 0.9 percent to 2,527.04, the highest since Oct. 2, at the 2 p.m. close in the emirate. The Bloomberg GCC 200 Index gained 0.8 percent.
“Buying momentum has been driven by real-estate stocks after the government announced spending plans last month” and Etisalat was the driving force today, said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. Etisalat has the heaviest weighting on the benchmark.
Shares in the U.A.E. capital are climbing as the oil-rich emirate transforming itself into a business and cultural hub unveiled plans last month to resume projects, including branches of the Louvre and Guggenheim museums, after reviewing their viability. Abu Dhabi’s benchmark index has gained 3 percent this month, while the sheikhdom’s real-estate measure has soared 21 percent.
Etisalat rose the most since Jan. 29 to 9.52 dirhams. The board proposed a dividend of 60 fils for 2011, the same amount it paid for 2010. The phone company also said it may outsource some operations as part of a plan to lower costs after posting a decline in 2011 profit. The shares have gained 4.3 percent this year.
Sorouh climbed to 1.11 dirhams, the highest close since Sept. 22. The company last week said 2011 profit surged as income from rentals and housing projects rose.
Dubai’s benchmark DFM General Index gained 1.7 percent to 1,596.26, the highest since June 19. The measure is up 18 percent in 2012.
“The market will probably stabilize in the coming days as investors have overreacted,” Henin said.
Rents in Abu Dhabi will drop further this year as property supply outstrips demand, said real-estate consultant CB Richard Ellis Group Inc. U.A.E. property markets suffered more than others in the Middle East with the onset of the global credit crisis. Since September 2008, Dubai house prices slumped more than 60 percent and the cost of residential real estate in the capital, Abu Dhabi, dropped by half as banks curbed mortgage lending and speculators fled.
About 176 million shares traded in Abu Dhabi today, compared with a 12-month daily average of about 65 million shares.
Saudi Arabia’s Tadawul All Share Index advanced 0.9 percent to 6,966.73, the highest close since September 2008. Qatar’s QE Index rose 0.4 percent. Oman’s benchmark stock index slipped 0.2 percent and Kuwait’s gauge retreated 0.3 percent. Bahrain’s measure declined 0.4 percent.
--Editors: Daliah Merzaban, Claudia Maedler
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