Dubai Shares Rise Most in Two Weeks on Bets Decline Is Overdone

Dubai’s shares advanced the most in almost two weeks on bets a drop this month prompted by worries Greece may default is overdone and amid reports France and Germany may have reached an accord on a Europe rescue fund.

Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower, rose 0.8 percent after Arqaam Capital Ltd. started the company with a “buy” recommendation. The stock has slumped 9.8 percent in October. Dubai Financial Market PJSC, the only Gulf Arab stock market to sell stock to the public, gained the most since August. The DFM General Index (DFMGI) added 0.4 percent, the most since Oct. 6, to 1,363.35 at the 2 p.m. close in Dubai. The gauge has lost 4.8 percent this month.

“The market was very weak in previous sessions, particularly for real-estate stocks, and today we are seeing a technical rebound,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “Some of these names have good fundamentals.”

The drop in Dubai’s benchmark this month left the 31 companies in Dubai’s benchmark gauge valued at an average 7.8 times estimated earnings, compared with 10.2 times for the Stoxx Europe 600 measure and 9.9 times for the MSCI Emerging Markets Index. U.S. stocks gained yesterday, with the Standard & Poor’s 500 Index advancing 2 percent, after data showed that homebuilders were less pessimistic than forecast in October, Bank of America Corp. posted a profit and Intel Corp. (INTC) forecast sales that beat analyst estimates.

$2.8 Trillion

The U.K.-based Guardian newspaper reported that Germany and France agreed to boost the region’s rescue fund, known as the European Financial Stability Facility, to 2 trillion euros ($2.8 trillion) from 440 billion euros. France and Germany are still working on how to increase the effective power of the rescue fund, a person with direct knowledge of the talks told Bloomberg News. The Stoxx Europe 600 Index gained as much as 1.1 percent.

Emaar increased the most since Oct. 6 to 2.48 dirhams. Arqaam assigned the company a price estimate of 4 dirhams. “Emaar Properties has been unduly penalized, due to skepticism over the viability of international operations, and lingering doubts over the ability of the business to scale up hotel and retail recurring revenues to drive growth and cash flow generation,” according to the Arqaam report dated yesterday.

Dubai Financial Market (DFM), down 9 percent this month as trading volumes declined, advanced 2.2 percent to 98.3 fils. About 59 million shares traded today, compared with a 12-month daily average of 109 million, according to data on Bloomberg.

Saudi Arabia’s Tadawul All Share Index (SASEIDX) retreated 0.7 percent. Kuwait’s gauge declined 0.2 percent, Oman’s MSM 30 Index lost 0.1 percent and Qatar’s QE Index (DSM) fell 0.3 percent. Abu Dhabi’s ADX General Index (ADSMI) and Bahrain’s BB All Share Index were little changed.

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