Dubai surges on debt offer

Dubai's index makes its largest gain for 11 weeks following Dubai's debt proposal for creditors of government conglomerate Dubai World.
"This is a relief rally that a solution is in hand," says Keith Edwards, head of asset management at Doha-based investment company The First Investor.
"The offer has to be positive - it has removed some uncertainty, which has been holding investors back. It's a solution to short-term problems, but it does not solve Dubai's long-term structural problems."
Emirates NBD and Abu Dhabi Commercial Bank climb 3.4 and 5.8 percent respectively. Both lenders are part of a Dubai World creditors' committee.
"UAE banks are winners here, given that they do not have to take debt provisions to Dubai World exposures, that had previously been expected to be taken through profit and loss during FY10," Ian Munro, MAC Capital head of research, wrote in a research note.
"We expect rallies in ADCB, DIB (Dubai Islamic Bank) and Emirates NBD based on the news and to a lesser extent Mashreqbank, NBAD (National Bank of Abu Dhabi) and FGB (First Gulf Bank) given their lower credit exposure to Dubai World."
Dubai's index climbs 4.3 per cent to 1,845 points, its largest gain since December 14.

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