Dubai’s stocks hit a 40-month high yesterday as investors betting on upbeat first-quarter earnings extended a buying spree, while Saudi Arabia’s bourse also rose, breaking strong technical resistance.
The Qatar Exchange’s benchmark index eased 0.03% to 8,518 points.
Dubai’s market climbed 2.4% to its highest close since November 2009 and is up 21% year-to-date.
The benchmark also eclipsed its previous 2013 year high set in late February. Investors usually cash in gains after qualifying for dividend payments and the market did retreat in March, but this year’s April surge has buoyed traders.
“This year, the trend is different because other than the sentiment and liquidity improvement, shareholders have decided to put most of the dividends back into the market, which has helped the move,” said Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services. “People are looking at next year’s dividends.”
Yasin predicted the market will make further gains in the second quarter.
Emaar Properties rose 2.1% and Dubai Islamic Bank gained 6.7%. Shares in contractor Drake and Scull jumped 7.5% in heavy trade as investors bet the firm could be an acquisition target, traders said.
Abu Dhabi’s benchmark added 0.6% to reach its highest close since October 2009.
In Saudi Arabia, the measure climbed 0.4% to an 11-month high. The index broke strong resistance levels as banks supported gains.
Saudi Investment Bank rose 4.9%. The lender on Sunday posted a 48% rise in quarterly profit.
SABB added 1.5%. After market hours, the bank posted an estimate-beating first-quarter profit of 948mn Saudi riyals ($252.79mn).
“There is an overall positive sentiment on the market on earnings - there is some speculation on stocks ahead of corporate earnings, which is driving up stocks,” said Mohammad Omran, a Riyadh-based financial analyst.
In Egypt, the benchmark climbed 0.9%, up for a fourth session since April 3’s four-month low as local bargain hunters bought shares while foreigners remained net sellers.
National Societe Generale Bank rose 7.1%, Telecom Egypt gained 2% and Commercial Bank International added 0.5%.
The government is hoping to clinch a $4.8bn loan deal with the International Monetary Fund in coming weeks as the country’s finances hit critical levels.
Elsewhere in the Gulf, Kuwait’s index advanced 0.9% to 6,944 points; Oman’s index gained 0.8% to 6,198 points, while Bahrain’s measure advanced 0.3% to 1,091 points.