Dubai’s shares surged to the highest level in more than a year as investors bet a recovery in the emirate is more likely amid signs the U.S. economy is improving.
Arabtec Holding Co. (ARTC), the United Arab Emirates’ biggest construction company, rose for the eighth time in nine days. Dubai Financial Market PJSC (DFM) surged 14 percent. The DFM General Index (DFMGI) advanced 3.1 percent to 1,754.20, the highest since November 2010, at the 2 p.m. close in the emirate. The measure rallied 21 percent in February, the biggest gain among benchmarks worldwide. The Bloomberg GCC 200 (BGCC200) Index of Persian Gulf stocks rose 0.6 percent.
“The global improvement has certainly helped improve the sentiment on Dubai’s stock market, as its economy depends on external demand, including tourism and trade,” said Anas el Maizi, an Abu Dhabi-based fund manager at Royal Capital PJSC. “The out-performance is above all expectations, and the current rally is too strong to be justified by a change in fundamentals.”
Dubai’s shares have rallied 30 percent so far this year after company earnings and dividends boosted investor confidence. That compares with an 8.5 percent gain in the Bloomberg GCC 200 Index (BGC200). Economic growth in Dubai, home to the world’s tallest skyscraper, will probably to rise to 5 percent this year after growing more than 3 percent in 2011, a government official said last month. The 31 stocks on the emirate’s benchmark are valued at an average 0.79 times net assets, compared with 1.75 times for emerging market stocks.
The Standard & Poor’s 500 Index (SPX) climbed 0.3 percent last week, completing its best February since 1998, as more Americans than forecast signed contracts to buy previously owned homes, jobless claims declined to a four-year low and the Conference Board’s index of consumer confidence rose to the highest level in a year. The MSCI Emerging Markets Index (MXEF) advanced 5.9 percent in February.
Abu Dhabi’s shares have also advanced after the government said in January it plans to resume real-estate projects after reviewing their viability. The emirate’s ADX General Index (ADSMI) increased 0.7 percent, rising for an eleventh day in the longest stretch of gains since May 2007.
In Dubai, Arabtec advanced 2 percent to 3.57 dirhams, bringing its rally this year to 125 percent. Dubai Financial Market, the only publicly traded Gulf Arab stock market, climbed to 1.19 dirhams, the highest since Aug. 4. Volumes in the emirate have picked up this year, reaching 789 million shares today, the highest since December 2009 and compared with the 12- month daily average of 127 million shares.
Oman’s MSM 30 Index (MSM30) rose 0.1 percent in its eighth day of gains. Kuwait’s Stock Exchange Price Index (KWSEIDX) climbed 0.9 percent. Bahrain’s BB All Share Index (BHSEASI) was little changed, while Qatar’s stock market was closed for a holiday. Saudi Arabia’s Tadawul All Share Index (SASEIDX) rose 0.2 percent in its 12th day of gains, the longest winning streak since August 2005. In North Africa, Egypt’s EGX30 Index (EGX30) declined 1.2 percent.
In Israel, the TA-25 Index (TA-25) gained 0.6 percent at the 4:30 p.m. close in Tel Aviv. The yield on the country’s 5.5 percent notes due January 2022 was unchanged at 4.7 percent.
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