Dubai makes biggest gain in 3 weeks
Dubai, March 10, 2013
Dubai's benchmark made its largest gain in three weeks as upbeat global markets spurred investors to buy back into the emirate's stocks following a recent slump.
Emaar Properties climbed 3 percent, Dubai Financial Market rose 2.7 percent and telecom operator du added 1.4 percent.
"Sentiment is still positive, helped by US markets hitting new highs," says Mohammed Yasin, managing director of NBAD Securities. "As other markets rise, it makes ours look like an even bigger bargain."
US and European bourse reached multiyear peaks on Friday.
Dubai's index climbed 1.5 percent to 1,909 points, its biggest gain since February 19. It is down 1.9 percent from February 24's 39-month peak.
"Fundamentally, we're still looking at a good performance from most companies and we've not had yet an influx of liquidity from dividend distributions," says Yasin.
"The market is in a sideways pattern, building support for the next rally, which will hopefully come with dividend pay-outs and first-quarter results from mid-April."
Arabtec climbed 0.9 percent to 2.14 dirhams, trimming its losses to 27.5 percent since it unveiled plans for a $1.8 billion capital increase. This will be dilutive to shareholders and will strengthen the grip of top shareholder Aabar, an Abu Dhabi state investment fund, over the builder.
Arabtec's shares will remain volatile until a shareholders' meeting to discuss the proposed rights issue, said Yasin.
"The drop was over-done and some long-term investors will build positions around these levels, while people who sold at 2.90 dirhams are coming back in," said Yasin, adding the ongoing uncertainty over Arabtec was a magnet for speculative traders. - Reuters