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| Two Emirati investors talk under a screen board at the Dubai Financial Market. Dubai shares yesterday made its largest one-day gain in almost a year, up 3.6% to its highest close since June as improving fundamentals locally brought back buying momentum |
Regional markets rallied yesterday as upbeat global sentiment spilled over, and Egypt’s bourse hit a seven-month high after the finance minister said it will sign a $3.2bn loan agreement with the International Monetary Fund.
Cairo’s main index rose 2.9% to its highest close since June 21.
“The IMF negotiations and the clearer timetable for presidential elections are boosting confidence in the market. Investors are pouring fresh cash into Egypt,” said Chamel Fahmy of Pharos Securities.
Presidential elections will be held in the first week of June, several weeks ahead of the previously announced end-June deadline for the vote.
Palm Hills jumped 10%, Egyptian Resorts and Amer Group surged 9.7 and 9.5% respectively.
In Dubai, the index made its largest one-day gain in almost a year, up 3.6% to its highest close since June as improving local fundamentals brought back buying momentum.
Bellwether Emaar Properties gained 3.9%, Dubai Financial Market jumped 7% and Air Arabia rose 6.5%.
“The UAE economy is faring better than what the market was telling us—things are stabilising and we’ve had some good corporate earnings,” said Fadi Al Said, head of investments at ING Investment Management. “The market is in an overbought situation technically but valuations are still distressed.”
Analysts expect Dubai’s market to consolidate at these levels with some profit-taking in the coming sessions.
Regional sentiment is supported by gains in world stocks, which hit a 6-1/2-month peak on Friday on hopes that Greece will seal a long-awaited bailout deal this week.
“Good news internationally reflected well on local sentiment which is also excited about seeing the rally continue on the back of good Emaar numbers and other company distributions,” said Haissam Arabi, chief executive at Gulfmena Investments.
In Abu Dhabi, the index ticked up 0.6%.
Dana Gas jumped 6.8%, Sorouh Real Estate surged 5.1% and Aldar Properties gained 3%.
In Saudi Arabia, petrochemical stocks led gains as the index rose 0.6% to a nine-month high. Trading was heavy, with investors bullish on the local economy.
Bellwether Saudi Basic Industries Corp (Sabic) was the main support, rising 0.5%. Advanced Petrochemical added 2.5% and Methanol Chemicals surged 9.9%.
In Kuwait, the index gained 1.7%, its largest one-day gain in 11 months, to close at a seven-month high.
Local investors bought small-caps but a trader said trading did not reflect company fundamentals.
“You have crazy valuations in companies that are not worth their valuations,” said a Kuwait-based trader who asked not to be identified.
Small-caps surged with Al Safwa Group up 9.4%, Al Ahlia Holding jumping 16.7% and Gulf Finance House climbing 7.8%.
Elsewhere, Oman’s index gained 0.3% to 5,670 points and Bahrain’s measure gained 0.3% to 1,147 points.