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UAE stock indexes yesterday rallied to the highest levels in almost five years on bets the economic recovery will spur company earnings.
The Qatar Exchange’s QE Index fell 0.1%.
Dubai’s benchmark DFM General Index gained 1.8% to 2,541.52, the strongest since November 2008, at the close in the emirate, as Dubai Investments jumped 6.1%, taking its three-day advance to 16%.
Abu Dhabi’s ADX General Index increased for an 11th day, its longest stretch of gains in two months, climbing 0.9% to 3,857.52, the highest since September 2008.
Dubai’s economy, which is recovering after a property market crash, is set to grow 4.6%, on average, between 2012 and 2015, more than twice as fast as in the prior four years, government forecasts show. Tamweel, a mortgage provider based in the emirate, jumped 3.6% to 1.16 dirhams, the highest close in a month, after reporting a 40% increase in second-quarter profit.
“The strength we’ve seen over the last three quarters clearly indicates strong expectations for earnings to improve, and growing bottom lines are a validation of market strength thus far,” said Amer Khan, a Dubai-based director at Shuaa Asset Management. The rally “points to how confident investors are in the prospects for the UAE economy to continue recovering and growing,” he said.
The DFM and ADX are among the world’s top-five best-performing indexes this year, according to data compiled by Bloomberg.
Shares of Dubai Financial Market, which have more than doubled this year, rallied 4.6% yesterday before the company reported an almost seven-fold increase in quarterly profit after market hours.
Saudi Arabia’s Tadawul All Share Index advanced for the first time in three days, gaining 1% to 7,740.46 after Sabic, the world’s largest petrochemicals company by market value, said it was studying investment opportunities in the US as the economic slowdown in Europe and China hurt its second- quarter sales. The stock advanced 1.4%, the most since May 21, to 93.50 riyals.
“Numbers are weaker than estimates, though, given affiliates also failed to meet estimates, this miss is expected,” Sriharsha Pappu, a Dubai-based analyst at HSBC Holdings, said by phone. Pappu, who has a buy rating on the shares, said analysts estimated Sabic’s earnings before the company’s units reported results. “We’re looking for better third-quarter results. This quarter is mostly down to pricing.”
Elsewhere in the Gulf, Oman’s MSM30 Index increased 0.2% and Kuwait’s gauge climbed 0.6%.