Dubai stocks rose, snapping a five- day drop, on bets the decline prompted by concern over Europe’s debt crisis was overdone given earnings prospects in the Persian Gulf emirate.
Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, gained the most since April 22 and Emirates Integrated Telecommunications Co. (DU), the second of two phone companies in the United Arab Emirates, advanced 0.7 percent. The DFM General Index (DFMGI) rose 0.3 percent, the first increase since May 7, to 1,486.36 at the 2 p.m. close in the emirate. The Bloomberg GCC 200 Index (BGCC200) advanced 0.4 percent.
“The drop associated with concerns over Europe’s debt crisis is completely unjustified, as it’s a correlation based purely on sentiment,” said Waleed Al Khateeb, the senior finance manager at Daman Securities in Dubai. “The measure rallied in the beginning of the year helped by improved earnings and dividends. At the time we were rightly not affected by global economic developments.”
Dubai’s benchmark index dropped 5.3 percent in the five trading days through yesterday, bringing the slump in the past month to 11 percent. The 31 companies on Dubai’s index valued at 9.9 times estimated earnings and compares with 12.2 times for Saudi Arabia’s Tadawul All Share Index (SASEIDX), data compiled by Bloomberg show. The kingdom’s benchmark index gained 0.5 percent today.
Dubai’s measure is the third-best performer in the Persian Gulf region so far this year with an advance of 9.8 percent after companies including Emaar posted first-quarter net income that beat estimates. The measure’s 14-day relative strength index dropped to 21 yesterday before reaching 23 today. A reading below 30 indicates to some investors that a security is poised to advance.
About 100 million shares traded in Dubai today, compared with this year’s peak of 835 million.
Emaar shares climbed 1.7 percent to 2.94 dirhams. Du, as Emirates Integrated is known, increased for the first time this week to 3.03 dirhams.
Elsewhere in the six-nation Gulf Cooperation Council, Oman’s benchmark stock index dropped 1.2 percent and Bahrain’s measure fell less than 0.1 percent. Kuwait’s gauge gained 0.1 percent while Qatar’s QE Index (DSM) and Abu Dhabi’s ADX General Index (ADSMI) were little changed.
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