Dubai’s shares climbed to a nine- month high on bets some of the emirate’s biggest companies will post full-year profit growth as the economy recovers.
Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, advanced to the highest level in almost three years. Emirates NBD, the biggest United Arab Emirates bank by assets, climbed 1.1 percent. The DFM General Index (DFMGI) rose 0.7 percent to 1,694.13, the highest since April 4, at the close in Dubai. The measure added 4.4 percent last week after U.S. lawmakers passed a bill averting the so-called fiscal cliff. Abu Dhabi shares increased 0.9 percent today.
“Expectations for annual results are strong,” said Nabil Al Rantisi, managing director of brokerage at Abu Dhabi-based Menacorp, who added that the U.S. budget news was also supporting shares.
A revival in real estate, retail and tourism helped Dubai’s economy expand 4.1 percent in the first half of 2012, putting the emirate on track to reach the government’s 5 percent forecast for the year, government data show. That would be the fastest pace of growth since 2007. Emaar Properties, which has the heaviest weighting on Dubai’s index, probably posted 15 percent growth in profit last year, according to the average estimate of 11 analysts compiled by Bloomberg.
Gulf Cooperation Council shares are luring investors as they offer attractive valuations relative to emerging-market peers, Franklin Templeton Investment Management Ltd. said last week. Dubai’s measure, the best performer in the six-nation GCC in 2012, trades at an estimated price-to-earnings ratio of 9.43 times, versus 11 times for the MSCI Emerging Markets Index.
Emaar, which will probably report results on Feb. 14, advanced 2.6 percent to 4.01 dirhams, the highest close since April 2010. The stock rallied 46 percent in 2012, recovering from two years of declines. Emirates NBD, which may report the same day, gained to 2.88 dirhams, the highest level since Dec. 6. The bank’s fourth-quarter profit may triple, according to the median estimate of three analysts on Bloomberg.
Dubai Financial Market PJSC (DFM), the only publicly traded GCC stock market, gained 0.9 percent as it said it will issue guidelines for sukuk trading. Mortgage provider Tamweel PJSC (TAMWEEL) decreased 4.2 percent after Dubai Islamic Bank PJSC (DIB) offered to take over the company through a share swap. Tamweel shares, which resumed trading in May 2011 after being suspended since 2008, will be delisted from the Dubai stock market after completion of the takeover. Dubai Islamic shares decreased 1 percent.
Abu Dhabi Rally
Dubai’s 14-day relative strength index surged to 76 today. A reading above 70 indicates to some analysts that a security or index is poised to decline. About 322 million shares were traded in Dubai today, compared with a 12-month daily average of 165 million.
Elsewhere in the GCC, Abu Dhabi’s ADX General Index (ADSMI) gained, bringing its six-day rally to 3.5 percent. Qatar’s QE Index (DSM) rose 0.8 percent. Bahrain’s measure and Kuwait’s gauge increased 0.2 percent and the Bloomberg GCC 200 Index (BGCC200) of the biggest companies in the Gulf advanced 0.3 percent. Oman’s MSM30 Index (MSM30) was unchanged and Saudi Arabia’s Tadawul All Share Index decreased 0.1 percent. In North Africa, the EGX 30 Index was little changed.
Israel’s TA-25 Index gained 0.5 percent at 2:35 p.m. in Tel Aviv. The yield on the government’s benchmark 5.5 percent bonds due 2022 rose six basis points to 3.78 percent.
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