Abu Dhabi’s shares rose to the highest in almost five months after Emirates Telecommunications Corp. proposed a dividend for 2011 and on investor bets the emirate’s spending plans would support real-estate companies.
Sorouh Real Estate Co. (SOROUH), the emirate’s second-largest developer, advanced 0.9 percent. Emirates Telecommunications, the United Arab Emirates’ biggest phone company known as Etisalat, rallied 2.3 percent. Abu Dhabi’s ADX General Index (ADSMI) rose for a third day, gaining 1 percent to 2,528.3, the highest intraday level since Oct. 3, at 11:30 a.m. in the emirate. The Bloomberg GCC 200 Index (BGCC200) was little changed.
Etisalat, the company with the heaviest weighting on the benchmark index, helped lead today’s gains “and buying momentum has been driven by real-estate stocks after the government announced spending plans last month,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi.
Shares in the U.A.E. capital are climbing as the oil-rich emirate transforming itself into a business and cultural hub unveiled plans last month to resume projects, including branches of the Louvre and Guggenheim museums, after reviewing their viability.
Etisalat, which is up 4.3 percent so far this year, said its board proposed a dividend of 60 fils for 2011, the same amount it paid for 2010. The phone company also said it may outsource some operations as part of a plan to lower costs after posting a decline in 2011 profit. The shares rose to 9.52 dirhams, the highest since Feb. 7.
Sorouh climbed to 1.10 dirhams, headed for the highest close since Sept. 27. The company last week said 2011 profit surged as income from rentals and housing projects rose.
“The market will probably stabilize in the coming days as investors have overreacted,” The National Investor’s Henin said.
Rents in Abu Dhabi will drop further this year as property supply outstrips demand, said real-estate consultant CB Richard Ellis Group Inc. U.A.E. property markets suffered more than others in the Middle East with the onset of the global credit crisis. Since September 2008, Dubai house prices slumped more than 60 percent and the cost of residential real estate in the capital, Abu Dhabi, dropped by half as banks curbed mortgage lending and speculators fled.
About 77 million shares traded in Abu Dhabi today, compared with a 12-month daily average of about 64.5 million shares.
Oman’s benchmark stock index was little changed and Kuwait’s gauge gained 0.5 percent. Qatar’s QE Index (DSM) rose less than 0.1 percent. Dubai’s DFM General Index (DFMGI) and Bahrain’s measure declined 0.2 percent.
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