The Abu Dhabi Securities Exchange outperformed its Dubai rival to climb 35 points as Aldar Properties posted a new record high.
The index increased 0.69 per cent to 5,145 points, less than 0.1 per cent below its 52-week high.
Resurgent property stocks and a return to form by market leader etisalat were the drivers of yesterday's surge. The latter climbed 0.49 per cent to Dh20.35 after falling five times in the previous six sessions. Since posting an adjusted 52-week high of Dh22.05 in mid-April, etisalat has dropped 7.7 per cent.
Aldar and Sorouh were yesterday's stars, however, jumping 5.14 and 2.9 per cent respectively. "The real estate sector is the key driver for the ADX – it's no longer banking," said Ayman El Saheb, Darahem Financial Brokerage director of operations.
Aldar closed on Dh13.55, to take its gains this week to 8.1 per cent, despite announcing the issue of 35 million new shares as part of its convertible sukuk.
Normally, such a dilution would lead to a price slump, but this looks unlikely this time, because of two factors. First, if the majority of bond holders are UAE nationals then it will swell the overall number of shares eligible for foreigners.
The company is currently at its 40 per cent foreign ownership, so any new shares available to non-UAE investors are likely to be greedily snapped up.
Secondly, EFG-Hermes has offered a fair value of Dh45 for Aldar, which is more than triple its existing share price and has stoked buying pressure.
Meanwhile, Sorouh closed above Dh10 for the first time since mid-March.
Overall, trading on the ADX was positive, with gainers outnumbering losers 25:3, while turnover topped Dh2bn for the first time this month. Dana Gas was the most active stock, claiming 87 million of the 435 million shares traded yesterday and this demand pushed it up 1.44 per cent to Dh2.11. The stock seems to be a new favourite of day traders thanks to its cheap price and sustained volatility, which has seen it close in a 7.5 per cent range over the past month.
Finance House is another stock seemingly in the thrall of speculators.
It advanced yet again yesterday to put it 16 per cent in a week.
Taqa falls, Methaq up
Taqa fell 4.35 per cent yesterday after clarifying its contradictory statements regarding a new Dh4.15 billion convertible bond. Just over three quarters of this will be allocated to two Abu Dhabi Government institutions along with "other" unspecified investors, while the remainder will be reserved for investors holding the stock on the record date of June 19.
Meanwhile, Methaq jumped 8.35 per cent to close on Dh4.54 and put it up 25 per cent in two days, but Ayman El Saheb, Darahem Financial Brokerage director of operations, believes the share's volatility is down to speculators, with no fundamental reason to back up its startling rise.
He added: "Maybe some investors have banded together or it's the work of a high net worth player, but Methaq increased by the near maximum for four sessions straight before crashing down and now the same pattern is repeating itself."