Abu Dhabi Stocks Head for 4-Month High on Earnings Optimism, Oil

Abu Dhabi stocks headed for the highest close in almost four months on bets the emirate’s biggest developers, which reported improved earnings, will benefit from infrastructure spending. Oil rose for a fourth day.

Aldar Properties PJSC (ALDAR), Abu Dhabi’s biggest property developer whose 2011 profit beat estimates, gained 2.9 percent. Sorouh Real Estate Co. (SOROUH), the emirate’s second-largest developer, headed for the highest close in almost five months. Abu Dhabi’s ADX General Index (ADSMI) rose 0.2 percent to 2,494.07 at 11:15 a.m. in the emirate, set for the highest close since Nov. 1. The Bloomberg GCC 200 Index (BGCC200) was little changed.

“Recent news on the real estate sector, including progress on Aldar and the commitment of the United Arab Emirates to some key projects, provided a rebound,” said Ahmed Talhaoui, the Abu Dhabi-based head of investment and asset management at Royal Capital PJSC.

Abu Dhabi, the oil-rich emirate transforming itself into a business and cultural hub, plans to resume projects including branches of the Louvre and Guggenheim museums after reviewing their viability, the government said in January. Aldar, which obtained 16.8 billion dirhams ($4.6 billion) from Abu Dhabi’s government by selling assets in December, last week surpassed analysts’ earnings estimates after sales of more land and properties to the state helped full-year profit.

Sorouh said on Feb. 15 2011 profit surged to 334.7 million dirhams from 7.44 million dirhams as income from rentals and housing projects rose. Aldar shares climbed to 1.07 dirhams, headed for the highest close since Oct. 30. Sorouh advanced 2.9 percent to 1.07 dirhams, poised for the highest close since Oct. 2.

Oil Advances

Real-estate prices have fallen more than 60 percent in Dubai and 45 percent in Abu Dhabi from 2008 peaks after the global credit crisis caused banks to curtail lending and speculators left the market. Developers completing contracts are supplying thousands of homes and offices at a time when demand is dropping.

Oil for March delivery advanced as much as 1.9 percent to $105.21 a barrel in electronic trading on the New York Mercantile Exchange after Iran said it halted some crude exports and investors bet fuel demand will increase as Europe moves closer to bailing out Greece. The MSCI Emerging Markets Index (MXEF) rose 0.3 percent after China cut reserve requirements for banks to fuel lending and buoy economic growth, boosting demand for riskier assets.

Dubai’s DFM General Index (DFMGI) fell from an eight-month high on investor speculation yesterday’s gain may have been overdone after the gauge rose 21 percent from this year’s low in January, entering a bull market. The measure’s 14-day relative strength index rose to 79 yesterday. A reading above 70 indicates to some investors that the benchmark is poised to decline.

Oman’s benchmark stock index and Kuwait’s gauge advanced 0.2 percent and Qatar’s QE Index (DSM) gained 0.1 percent. Bahrain’s measure climbed 0.7 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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