Reuters/Dubai
Bourses in the UAE and Qatar rebounded yesterday while Dubai developer Emaar Properties surged after the firm said it would launch an initial public offer for its malls unit next month.
Stock markets in both countries had dipped in the previous session as passive funds tracking MSCI’s frontier market index liquidated part of their holdings of UAE and Qatari stocks.
MSCI upgraded the UAE and Qatar from frontier to emerging market status in May and arranged for frontier funds to exit those countries through a series of monthly sales, one of which took place at the end of last week.
Abu Dhabi’s bourse rose 0.2% on the back of its heaviest MSCI index components. National Bank of Abu Dhabi rose 0.7% and First Gulf Bank added 1.1%.
Dubai’s index jumped 2.7% and closed above 5,000 points for the first time since early June thanks to Emaar, the emirate’s largest listed developer, which surged 8.8% to 11.15 dirhams, its highest close since March 2008.
The company said yesterday that it would launch an IPO for its malls unit next month in what will be the emirate’s largest share sale in recent years. Emaar plans to sell at least 15% of the malls and retail unit on the Dubai Financial Market and to list the shares in October, a spokesman told Reuters.
Earlier this year, Emaar said it would sell up to 25% of the unit in an offer likely to raise 8bn to 9bn dirhams ($2.18bn-$2.45bn) and use the cash to pay a special dividend to its shareholders.
Saudi Arabia’s bourse, boosted by regulators’ plans to open it to direct foreign investment early next year, which were announced last month, continued to climb, rising 0.6% to a fresh six-year high of 11,112 points.
Al Rajhi Bank and Saudi Kayan Petrochemical Co were the main supports, adding 2.5% and 4.5% respectively. Food producer Savola Group, up 1.2%, and utility firm Saudi Electricity Co, which rose 2.6%, also buoyed the benchmark.
“Across the board there’s interest from local and regional investors to participate and position prior to the opening of the market,” said Marwan Shurrab, fund manager and head of trading at Vision Investments in Dubai.
But some analysts say the market is becoming stretched.
“There are already signs that the...index is moving towards being overheated, having risen over 10% since the announcement on July 21,” Riyadh-based Jadwa Investment said in a note yesterday.
“It is important to highlight, however, that the surge in optimism fuelling the current TASI rise is not based wholly on speculative gain or positive sentiment - it is also a due to a flourishing Saudi economy, which is underpinned by strong economic fundamentals.”
Egypt’s bourse edged up 0.1% yesterday on the back of blue chip Commercial International Bank, up 0.6%, and brokerage Pioneers Holding, which gained 2.8%.
Elsewhere in the Gulf, Kuwait’s index added 0.4% to 7,431 points; Oman’s measure climbed 0.1% to 7,367 points, while Bahrain’s index slipped 0.2% to 1,472 points.