Abu Dhabi Shares Advance, Buoyed by Fed Stimulus, Oil Gains; Arabtec Drops

Abu Dhabi stocks rose the most in more than two weeks as global shares and oil gained after the Federal Reserve announced another round of bond purchases to boost the world’s biggest economy. Dubai’s benchmark dropped.

First Gulf Bank PJSC, the United Arab Emirates lender controlled by Abu Dhabi’s ruling family, climbed to the highest since May. National Bank of Abu Dhabi PJSC increased to the highest this year. The ADX General Index rose 0.7 percent, the most since Oct. 21, to 2,770.37 at the 2 p.m. close in Abu Dhabi. Dubai’s measure lost 0.9 percent as Arabtec Holding Co. and Dubai Islamic Bank PJSC posted lower quarterly earnings. The TA-25 in Tel Aviv added 0.3 percent.

Global stocks jumped last week after the Fed announced plans to buy an additional $600 billion of Treasuries in a second round of quantitative easing. The central bank kept its pledge to hold interest rates low for an “extended period” after Chairman Ben S. Bernanke said the program could be modified in some way. The dollar last week fell the most in four against the currencies of six major trading partners.

“The dollar exchange rate may depreciate” further and “could eventually make U.A.E. assets cheap for international investors,” said Nabil Farhat, partner at Abu Dhabi-based Al Fajer Securities. All of the Gulf Cooperation Council’s members except Kuwait peg their currencies to the dollar.

In the U.S., the Standard & Poor’s 500 Index ended the week with a gain of 3.6 percent at the highest in more than two years. The Stoxx Europe 600 Index increased 2.3 percent in the week and the 21-country benchmark MSCI Emerging Markets Index surged 4.5 percent.

Oil Climbs

Crude oil rallied 6.7 percent, ending the week at $86.85 a barrel on the New York Mercantile Exchange, the highest settlement price in more than two years. The six nations of the Gulf Cooperation Council, including the U.A.E. and Saudi Arabia, supply about a fifth of the world’s oil.

First Gulf jumped 3.9 percent to 17.55 dirhams, the highest since May 24. National Bank of Abu Dhabi rose 2.1 percent to 12.25 dirhams, the highest since December.

Dubai’s DFM General Index declined to 1,721.66, the lowest in a month.

Arabtec lost 5.1 percent, the most since May 25, to 2.04 dirhams. The biggest construction company in the U.A.E. by market value reported a 96 percent drop in third-quarter profit, missing analysts’ estimates as a property slump and project cancellations hurt earnings.

Dubai Islamic, the biggest Shariah-compliant lender in the U.A.E., retreated 3.8 percent, the most since April, as quarterly profit fell 10 percent to 270 million dirhams ($74 million). Deyaar Development slumped 7.8 percent, the most since May, after posting a third-quarter loss.

Israel Bonds

The Israel Corp. climbed 1 percent to 4,011 shekels. Clal Finance Brokerage Ltd. raised its price estimate on the holding company controlled by the Ofer family to 4,400 shekels from 3,700 shekels.

Israeli bonds tracked a decline in Treasuries after U.S. payrolls report showed employers added more jobs in October than analysts had forecast. The yield on Israel’s benchmark 5 percent Mimshal Shiklit bond due in January 2020 rose 3 basis points to 4.33 percent. The shekel weakened 0.4 percent to 3.5848 per dollar on Nov. 5.

Oman’s MSM30 Index added 0.5 percent. Qatar’s QE Index advanced 0.7 percent, while Kuwait’s gauge slipped 0.1 percent. Saudi Arabia’s Tadawul All Share Index dropped 0.4 percent after advancing 1.9 percent yesterday and Bahrain’s gauge retreated 0.2 percent. Egypt’s EGX30 Index increased 1 percent.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net.

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