The DFM extended its winning run to three sessions on Thursday thanks to April’s best turnover.
Brokers had warned trading would have to improve to see Dubai overcome the troublesome 5,550-point resistance level, but the index had little difficulty in closing above this figure after Dh1.88 billion of shares changed hands.
The DFM General Index closed up 1.25 per cent at 5,585 points as the market heavyweights and recent favourites all made gains.
Arabtec reached another record close, this time rising 3.48 per cent to Dh14.85, while du and DFM Company added 3.19 and 3.78 per cent respectively.
“The DFM stock was targeted after it fell 10 to 15 fils after its first quarter results earlier this week,” said Ayman El Saheb, Darahem Financial Brokerage director of operations.
“This could have been a reaction to its imminent conversion to a Shariah-compliant index or speculators might have been trying to build momentum, or perhaps it was simply institutions building positions at a good price.
“After Wednesday’s surge in volumes we expected the market to sustain its gains yesterday.”
As predicted by Emirates Business on Wednesday, Emaar’s minor fall in profit growth did not harm its share price, with the developer climbing 0.45 per cent to Dh11.15.
Tamweel was the star stock, rising 5.1 per cent to Dh7.83, which is an all-time high, although it remains below its record intraday price of Dh8.10. The mortgage lender’s shares look set for further gains, with Emaar Saudi Financial Services offering a fair value for Tamweel of around Dh10.
This is justified, ESFS say, because Tamweel is forecast to see earnings increase by a compound annual growth rate of 50 per cent between the end of 2007 and 2010.
El Saheb is also bullish about Tamweel, saying the lender could break Dh8.20 in the near future.
Deyaar’s shares dived in early trading after the company confirmed its CEO Zack Shahin had resigned after being arrested on suspicion of embezzlement. The stock fell to Dh2.24 in intraday trading, before recovering to close down 0.85 per cent at Dh2.33.
“Air Arabia, Tamweel, the DFM and Union Properties were the big movers yesterday,” said El Saheb.
“Prices were very tempting, but whether this buying was from retail or institutions is impossible to say.”
Meanwhile, the Abu Dhabi Securities Market also made it three in a row, rising 0.68 per cent to close on 4,911 and breaking the 4,900 resistance mark along the way.
DFM crosses key 5,550 level