Abu Dhabi Shares Rise to 7-Month High on Bets of MSCI Upgrade This Week

Abu Dhabi’s benchmark stock index advanced to the highest since November on speculation the United Arab Emirates will be upgraded to emerging market status by MSCI Inc. (MSCI) this week. Egypt’s stocks increased.

Abu Dhabi Commercial Bank PJSC (ADCB) climbed 1.9 percent after it said it will make a profit of about 1 billion dirhams ($272 million) from the sale of its stake in RHB Capital Bhd. Emirates Telecommunications Corp., the U.A.E.’s biggest phone company, gained for a 10th day, the longest winning streak since 2005. The ADX General Index (ADSMI) climbed 0.5 percent to 2,775.44, the highest since Nov. 1, at the 2 p.m. close in Abu Dhabi. Dubai’s DFM General Index (DFMGI) fell 0.1 percent after rising 2.8 percent last week.

MSCI, which classifies six of the seven Gulf markets as frontier, will decide on whether to raise the U.A.E. to emerging-market status on June 21. Bourses in the country said May 29 that market participants are ready to use an upgraded trading system, the so-called delivery-versus-payment, meeting one of the criteria for an upgrade at MSCI.

“In the coming days, all investors are eyeing the MSCI decision to include the U.A.E.” in the emerging market index, said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai. “All the positivity in the market is related to that.”

Citadel Gains

Exchanges in the U.A.E. may attract $1.5 billion if the nation secures the upgrade, Sebastien Henin, who helps oversee $110 million at The National Investor in Abu Dhabi, said in April. Frontier-market is a designation that applies to economies and financial markets that are less developed. Saudi Arabia’s market isn’t classified at MSCI. Qatar is also under review for a reclassification this week. The nation’s benchmark index gained 0.2 percent.

In North Africa, Egypt’s EGX30 Index advanced 1.6 percent to the highest level since January 27. Citadel Capital SAE climbed 4 percent to 6.32 Egyptian pounds, the highest since March 23.

Abraaj Capital Ltd., a Dubai-based private-equity firm, may hire Morgan Stanley as an adviser on the planned acquisition of a stake in the Egyptian private-equity company, two people familiar with the situation said June 16 after markets closed.

Abu Dhabi Commercial Bank added 1.9 percent to 3.29 dirhams, the highest since October 2008. The U.A.E.’s third- biggest bank by assets on June 17 agreed to sell its 24.9 percent stake in Malaysian lender RHB Capital to Abu Dhabi’s state-owned Aabar Investments PJSC for 10.80 ringgit a share, or about 5.9 billion ringgit ($1.9 billion).

Israel Bonds Fall

Etisalat rose 1.4 percent, the most since Feb. 8, to 11.10 dirhams.

The Bloomberg GCC 200 Index (BGCC200) dropped 0.5 percent and Saudi Arabia’s Tadawul All Share Index (SASEIDX) retreated 0.9 percent. Bahrain’s BB All Share Index fell 0.2 percent and Oman’s benchmark stock index was little changed. Kuwait’s gauge slipped 0.4 percent.

Israel’s benchmark TA-25 stock index gained less than 0.1 percent and the Mimshal Shiklit government bond due January 2022 fell, pushing the yield three basis points higher to 5.38 percent.

Delivery-versus-payment is a securities industry procedure in which payment for a security must be made when the security is delivered. Usually, the payment is made to a bank, which in turn pays for the security.

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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