DUBAI: Gulf Arab bourses surged across the region on Thursday ahead of Eid Al-Fitr, as strength in international stock markets, positive US economic data and bouyant oil prices cheered investor sentiment.
Dubai’s bourse closed at its highest level since June and Abu Dhabi reached levels last seen in November, while Qatar was the region’s biggest gainer surging 2.7 percent.“The real catalyst is that it is hard to ignore a very strong performance in international markets,” said Ali Khan, managing director and head of brokerage at Arqaam Capital in Dubai. “We have strong economic data out of the US and Asia is reacting favorably to it.” Asian shares hit their highest level in 13 months on signs the global economic recovery could be strengthening, while oil prices hovered around $72.50 a barrel after rising more than 5 percent this week.
Investors in the Gulf also took heart from a strong performance by Saudi Arabia’s benchmark, which rose by 1.6 percent on Wednesday. Kingdom’s TASI index was closed on Thursday.
Industries Qatar jumped 8.4 percent to record its biggest one-day gain in six months. “The economic figures point to a very stable recovery and so we are seeing an increased interest in manufacturing stocks, even in the Gulf,” said Keith Edwards, head of asset management at Doha-based investment company The First Investor.
Dubai’s benchmark rose 2.1 percent led by Dubai Financial Market which surged 10.5 percent to an 11-month closing high, recording its largest one-day gain since March.
Commercial Bank of Dubai and Dubai Islamic Bank both rose by nearly 5 percent. “Banks continue to attract buyers as liquidity concerns and issues over loan book quality have lessened,” said Matthew Wakeman, managing director, cash and equity-linked trading at EFG-Hermes in Dubai. “The sector looks in good shape to profit from any upturn that we see in the coming quarters.”
Arabtec rose 1.9 percent after Morgan Stanley raised its price target to 4.3 dirhams from 3 dirhams and said it was more confident of the firm’s opportunities outside Dubai, particularly in Saudi Arabia. Abu Dhabi’s index advanced 1.6 percent led by property stocks as Sorouh Real Estate rallied 7 percent after the emirate’s second largest property firm confirmed its chief executive has resigned.
Aldar Properties rose 5 percent after it signed an agreement on Wednesday with Al-Futtaim Group to build the Middle East’s largest IKEA on Abu Dhabi’s Yas Island.
Oman hit fresh 10-month closing levels boosted by Bank Muscat which gained 4 percent.
The stock rose after a report that the owner of Saad Group reached a settlement over debt to local Saudi banks, boosting hopes that other banks may get repaid as well. “This is positive for Bank Muscat and we are seeing local, regional and international buying in the stock,” said Adel Nasr, local brokerage manager at United Securities in Muscat.
Bank Muscat said in June its exposure to Saudi Arabia’s troubled Saad Group and Ahmad Hamad Algosaibi Group totalled $171 million.