Dubai stocks headed for the highest close in more than a week after Dubai Electricity & Water Authority said it will pay loans ahead of schedule and the Federal Reserve raised its assessment of the U.S. economy.
Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, was poised for the highest close in almost two weeks. Dubai Islamic Bank PJSC (DIB) rose 1.8 percent. The DFM General Index (DFMGI) gained 1.3 percent to 1,703.94, headed for the highest close since March 5, at 11:55 a.m. in the emirate. The cost of protecting Dubai’s debt against default dropped 17 basis points to 355 yesterday, according to data compiled by Bloomberg.
Dubai Electricity Chief Executive Officer Saeed Mohammed al-Tayer said yesterday the state-run utility will repay 1.2 billion dirhams ($327 million) in loans ahead of schedule. Default risk for Dubai has declined this year partly on pledges that the emirate’s main companies will manage to refinance debt without state assistance.
“The news that Dubai Electricity & Water settled some of its debt early gave a boost to investors’ risk appetite,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “They were also encouraged by the gains in the U.S. market after the federal reserve” announcement, he said.
In the U.S., the Standard & Poor’s 500 Index (SPX) rallied 1.8 percent yesterday after a report showed retail sales increased the most in five months and the Fed said it expects “moderate economic growth” and predicted the unemployment rate “will decline gradually.” The MSCI Emerging Markets Index (MXEF) advanced 0.3 percent.
Emaar gained 2.3 percent to 3.12 dirhams, headed for the highest close since March 4. Dubai Islamic, the United Arab Emirates’ largest bank complying with Shariah rules, rose to 2.21 dirhams.
The Bloomberg GCC 200 (BGCC200) Index gained 0.1 percent. Abu Dhabi’s ADX General Index (ADSMI) increased 0.3 percent in its fifth day of gains. Oman’s MSM 30 Index (MSM30) rose 0.4 percent, while Qatar’s QE Index (DSM) was little changed. Kuwait’s Stock Exchange Price Index (KWSEIDX) decreased less than 0.1 percent. Bahrain’s BB All Share Index (BHSEASI) dropped 0.3 percent.
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