Dubai stocks make biggest gain in 8 months
Dubai, May 21, 2014
Property-related stocks led gains as Dubai's index rallied from a six-week intraday low in its largest one-day advance since mid-September on Wednesday, while Egypt eased from a 69-month peak.
Dubai's benchmark rose 4.2 percent. It had lost 12.6 percent in the previous five sessions and fell a further 2.4 percent intraday before rebounding. The measure is now up 43.9 percent this year and has tripled since the start of 2013.
"The sell-off was expected but exaggerated - the decline in the prices on many of the heavyweight stocks increased investors' appetite to buy on dips," said Firass Yaish, business development manager at One Financial Markets in Dubai.
"Volatility is still the name of the game and we need to keep in check the rising PE (price to earnings ratios) of most of the stocks listed on the DFM (Dubai Financial Market)."
Builder Arabtec climbed 3 percent, Union Properties jumped 7.7 percent, Emaar Properties rose 2.5 percent and developer Deyaar added 5.4 percent.
This quartet, a favourite for day traders and speculators, accounted for about two-thirds of all shares changing hands on the index.
Abu Dhabi climbed 1.7 percent, rallying from Tuesday's two-month low.
"Q1 numbers have been very strong from a lot of (UAE) heavyweights, in banking and real estate," said a Dubai-based equity sales director.
"The performance over the past year was very aggressive, although volatility did increase over the last month, which was a sign that a correction was imminent."
Egypt's main share index slipped 0.4 percent to ease from a 69-month high, although late buying pulled many stocks into positive territory and as many rose as fell.
The bourse has been buoyant since Saudi Arabia, Kuwait and the United Arab Emirates promised billions of dollars in loans and donations to Egypt after the army deposed Islamist President Mohamed Mursi last year.
Earlier this month, the head of Egypt's national oil company said Gulf oil producers had given his country free fuel totalling $6 billion. The aid helps reduce the costs of state fuel subsidies and the drain on foreign exchange reserves.
"This gives the government breathing room to take steps regarding subsidies and tax collection," said the sales director. "The news flow about international companies moving forward with their investment plans and adding capacity is another positive sign."
Citadel Capital dropped 1.5 percent and Pioneers Holding fell 1.3 percent.
"Egypt stocks never got that cheap, even during the most stressful times - the opportunity if the people running the country get things even half right is still massive and companies will benefit," added the director.
DUBAI: The index rose 4.2 percent to 4,850 points.
ABU DHABI: The index climbed 1.7 percent to 4,831 points.
EGYPT: The index fell 0.4 percent to 8,627 points.
QATAR: The index slid 0.4 percent to 12,680 points.
SAUDI ARABIA: The index rose 0.4 percent to 9,766 points.
KUWAIT: The index slipped 0.02 percent to 7,378 points.
BAHRAIN: The index rose 0.1 percent to 1,452 points.
OMAN: The index fell 0.6 percent to 6,759 points. - Reuters