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29 March 2024

UAE, Qatar bourses hit multi-year highs

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By Reuters

Stock markets in the United Arab Emirates and Qatar rose to new multi-year highs on Thursday despite a sell-off in emerging markets around the world, as retail investors in the Gulf bought selected stocks viewed as laggards. Egypt's bourse rose on the back of a reduction in street violence.

"It's a good surprise to see that the most internationally-linked markets like UAE have been resilient despite the sell-off in some emerging markets," said Sebastien Henin, portfolio manager at The National Investor in Abu Dhabi.

"There is a good dynamic from a macro point of view and financial markets are benefiting from that."

Henin said expectations of double-digit growth in 2013 net income for Gulf companies were driving bullish sentiment. With their current account and state budget surpluses and currency pegs to the U.S. dollar, Gulf economies are generally less vulnerable than most to capital outflows caused by rising U.S. yields.

Dubai's index rose 1.1 per cent to its highest close since November 2008. The index broke out of a sideways pattern which had prevailed for two weeks; lagging second-tier property stocks surged once again.

Union Properties jumped 10.4 per cent, up for a fifth straight day as the stock played catch-up with the wider market. UP shares are up 37.5 per cent year-to-date, compared with Dubai's gains of 66.4 per cent. The stock accounted for a third of all trading on the bourse on Thursday.

Abu Dhabi's measure advanced 0.7 per cent to a new 58-month high.

In Qatar, banks helped the benchmark rise 0.4 per cent, up for a fifth straight session to hit a near five-year high. Qatar International Islamic Bank and Qatar Islamic Bank rose 4.6 and 2.4 per cent.

Elsewhere, Cairo's benchmark index gained 0.7 per cent, recovering ground for a third session from Monday's two-week low.

In the last few days a strict curfew in much of the country and the arrest of Muslim Brotherhood leader Mohamed Badie have partially reassured investors, after hundreds of anti-government protesters were killed in the army's crackdown.

However, the country's long-term political and economic problems show little if any sign of being solved, so an extended equities rally looks unlikely to many.

"We're seeing the market pick up because it has been down for a while and because things are calmer," said Ashraf Akhnoukh, senior equity sales trader at CIBC Brokerage in Cairo.

"I think there is more room for downside after the politics is over. We have a political roadmap but the economic numbers show that we still have a long way to go for full recovery."

Property developer Palm Hills dominated trade, rising 1.3 per cent.

Local and Arab regional investors were net buyers of Egyptian stocks, while foreigners remained net sellers, bourse data showed.

In Saudi Arabia, the index slipped 0.3 per cent, coming off Wednesday's 59-month high. Investors booked gains on food and agriculture shares - that sector's index fell 1.0 per cent.

THURSDAY'S HIGHLIGHTS

DUBAI: The index rose 1.1 per cent to 2,700 points.

ABU DHABI: The index climbed 0.7 per cent to 3,949 points.

QATAR: The index advanced 0.4 per cent to 10,110 points.

EGYPT: The index gained 0.7 per cent to 5,425 points.

SAUDI ARABIA: The index slipped 0.3 per cent to 8,192 points.

KUWAIT: The index ticked up 0.03 per cent to 8,104 points.

OMAN: The index eased 0.04 per cent to 6,901 points.

BAHRAIN: The index climbed 0.3 per cent to 1,203 points.