Dubai Shares Advance on Speculation Eight-Day Drop Overdone
Dubai’s benchmark stock index rose on speculation the decline in the past eight days was overdone given higher first-quarter earnings and before Dubai Financial Market PJSC (DFM) reported results.
Air Arabia PJSC (AIRARABI), the Middle East’s biggest discount airline, gained the most in more than a month after posting a 12 percent profit increase. Dubai Financial Market, the only publicly traded Gulf Arab stock market, climbed 1.9 percent. The DFM General Index (DFMGI) rose 0.3 percent, the first gain since April 24, to 1,564.15 at the 2 p.m. close. The measure slumped 6.6 percent in the eight days through yesterday. The Bloomberg GCC 200 Index (BGCC200) fell 0.5 percent.
“We had seen some good profit-taking after a strong rally” even after companies including Emaar Properties PJSC posted improved earnings, said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “Internationally, the world picture is not improving, the downtrend may continue even if the outlook for Dubai looks far better. Dubai may follow the international path.”
Dubai’s stock index has returned 16 percent so far this year, the best performer in the Persian Gulf, as companies including Emaar (EMAAR) posted quarterly profit that beat estimates. That compares with an advance of 3.4 percent in the STOXX Europe 600 Index. (SXXP) The volumes of shares traded in Dubai was 185 million compared with this year’s peak of 835 million shares.
Air Arabia rose 1.9 percent, the most since March 28, to 60.3 fils. Net income climbed to 47.7 million dirhams ($13 million) from 42.7 million dirhams a year earlier.
Dubai Financial Market advanced 1.9 percent, the most since April 24, to 1.09 dirhams. The company, whose shares are up 30 percent in 2012 after a slump of 44 percent last year, is scheduled to announce quarterly results today.
Elsewhere in the Persian Gulf, stocks retreated after European elections stoked speculation that austerity efforts will be derailed. The MSCI Emerging Markets Index (MXEF) tumbled 1.3 percent at 1:36 p.m. in London.
Oman’s MSM 30 Index (MSM30) fell 1 percent, Abu Dhabi’s ADX General Index (ADSMI) and Saudi Arabia’s Tadawul All Share Index (SASEIDX) slipped 0.3 percent. Qatar’s QE Index (DSM) dropped 0.4 percent and Bahrain’s gauge retreated less than 0.1 percent. Kuwait’s measure gained 0.3 percent.
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