Middle East bourses rebounded on Wednesday on positive queues from global markets; Dubai, which posted the biggest gains, was also boosted by good fourth-quarter earnings and contract announcements from the real estate sector.
Dubai’s index surged 1.7 percent to a new multi-year closing high of 3,875 points, confirming a break above technical resistance at 3,807 points, the 50 percent retracement of its fall from the 2008 peak.
Union Properties, which this week posted an eightfold rise in annual profits, gained 9.8 percent on Wednesday. Another developer, Deyaar, rose 4.8 percent after its annual profit quadrupled. .
Construction firm Drake and Scull jumped 6.9 percent after the company said it had won a contract worth 328 million riyals ($87.5 million) to do mechanical, electrical and plumbing works at King Saud University in Riyadh.
Other markets in the region posted more modest gains amid slower newsflow, but reflected a general improvement in investor sentiment, said Sebastien Henin, portfolio manager at The National Investor.
“I guess if we don’t have a major international crisis in fixed income, currencies or equities we can imagine that regional equity markets will outperform both developed and emerging markets,” he said.
Stock markets in the Middle East are less vulnerable to large-scale changes in risk appetite simply because there is little foreign investment, he noted.
Abu Dhabi’s index rose 0.6 percent. Shares in Abu Dhabi Islamic Bank surged 6.3 percent to their highest level in more than six years after the bank posted a forecast-beating 41 percent fourth-quarter profit jump.
Saudi Arabia’s benchmark rose 0.3 percent with gains across different sectors. Almarai, the Gulf’s biggest dairy company, was among the top gainers, rising 4.2 percent after it announced the launch of a new poultry facility.
WEDNESDAY’S HIGHLIGHTS
DUBAI
* The index rose 1.7 percent to 3,875 points.
ABU DHABI
* The index gained 0.6 percent to 4,688 points.
SAUDI ARABIA
* The index added 0.3 percent to 8,793 points.
EGYPT
* The index rose 0.8 percent to 7,344 points.
QATAR
* The index gained 0.8 percent to 11,135 points.
OMAN
* The index edged up 0.6 percent to 7,095 points.
KUWAIT
* The index slipped 0.1 percent to 7,803 points.
BAHRAIN
* The index rose 0.8 percent to 1,300 points.
Source: Reuters
