Dubai’s shares climbed the most in three weeks on optimism a bailout for Spain’s banks will help ease Europe’s crisis and after the International Monetary Fund said the United Arab Emirates recorded a fiscal surplus.
Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower, advanced to the highest in almost two weeks. Deyaar Development (DEYAAR) PJSC jumped 3.6 percent. The DFM General Index (DFMGI) rose 1.1 percent, the most since May 21, to 1,483 at the 2 p.m. close in the emirate, bringing the gain in the past five days to 3.2 percent. The Bloomberg GCC 200 Index (BGCC200) rallied 0.5 percent and Saudi Arabia’s benchmark Tadawul All Share Index (SASEIDX) jumped 0.6 percent.
Dubai, the second-largest of seven sheikhdoms that make up the U.A.E., relies on trade, tourism and property for growth. Spain requested as much as 100 billion euros ($126 billion) of bailout funds after weeks of escalating concern that bad loans at its banks might overwhelm public finances. Global stocks also gained after Chinese exports topped forecasts.
There is “a knee-jerk positive reaction everywhere to the extension of a helping hand to Spanish banks,” said Julian Bruce, the Dubai-based director of institutional sales trading at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank. “On a local level, the news that the U.A.E. swung to $11 billion fiscal surplus in 2011 will be considered as supportive.”
The U.A.E. posted an estimated consolidated balance surplus of 38.6 billion dirhams ($11 billion), or 2.9 percent of gross domestic product, in 2011 from a deficit in the previous two years, the IMF said in a report this month.
Crude for July delivery increased as much as 3 percent to $86.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 1.1 percent last week to $84.10, the first weekly gain in six. Gulf Arab oil exporters, including the U.A.E. and Saudi Arabia (SABIC), supply about a fifth of the world’s oil.
The MSCI World Index gained 0.7 percent, the STOXX Europe 600 Price Index (SXXP) advanced 0.9 percent and the MSCI Emerging Markets Index (MXEF) climbed 1.5 percent. Chinese exports jumped 15.3 percent from a year earlier in May, exceeding all 29 estimates in a Bloomberg News survey.
Dubai’s economic growth may accelerate to between 4 percent and 5 percent in 2012 from 3.4 percent last year, Al Ittihad reported last week, citing the director general of the emirate’s chamber of commerce and industry, Hamad Mubarak Buamim. Trade accounts for 35 percent of gross domestic product in the emirate, Ahmed Butti Ahmed, director general of Dubai Customs, said in April.
“Although financial vulnerabilities of the U.A.E. have decreased since the 2008 global real estate collapse, given the U.A.E.’s interconnectedness, it remains exposed to global financial conditions,” according to the IMF.
Dubai’s measure has retreated 15 percent from this year’s high in March as European officials failed to control the spread of the region’s credit crisis.
Emaar rose 0.7 percent to 2.88 dirhams, the highest close since May 31. Deyaar, the developer controlled by Dubai Islamic Bank (DIB), increased the most since April 24 to 31.3 fils.
Elsewhere in the Persian Gulf region, Abu Dhabi’s ADX General Index (ADSMI) rose 0.4 percent and Qatar’s shares advanced 0.2 percent. Oman’s MSM30 Index (MSM30) retreated 0.2 percent while Kuwait’s gauge fell 0.6 percent and Bahrain’s measure declined 0.2 percent.
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