Dubai Shares Gain on Europe Plan; Kuwait Rises on Cabinet Shift

Dubai’s shares advanced the most in three weeks, helping gains in Persian Gulf stock markets, after oil surged on optimism that Europe’s debt crisis may be contained, boosting the appeal for riskier assets.

Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, climbed 1.8 percent. Dubai Islamic Bank PJSC (DIB), the United Arab Emirates’ biggest bank complying with Islamic banking rules, rose the most since May. Dubai’s benchmark DFM General Index (DFMGI) increased 0.7 percent, the most since June 11, to 1,462.52 at the 2 p.m. close in the emirate. The gauge slumped 12 percent in the second quarter. The Bloomberg GCC 200 Index (BGCC200) of the Persian Gulf region’s top 200 equities rose 0.1 percent, while Kuwait’s shares advanced as the resignation of the nation’s cabinet was accepted.

Oil for August delivery surged 9.4 percent on June 29 to $84.96 a barrel in New York after European leaders agreed to ease repayment rules for emergency loans to Spanish banks and relax conditions on help for Italy. It was the biggest increase since March 2009. Gulf Arab oil exporters, including the U.A.E. and Saudi Arabia (SABIC), supply about a fifth of the world’s oil.

“After such an aggressive move in global markets and oil, regional markets have to react,” said Chahir Hosni, equity sales manager at EFG-Hermes Holding SAE in Dubai. “Things will improve maybe for this week, but I wouldn’t get carried away as we are heading into summer and Ramadan where things are expected to be quiet.”

U.S. Shares Gain

U.S. markets advanced as economic reports during the week showed home sales and orders for durable goods rebounded while consumer spending stalled and confidence among Americans declined to the lowest level this year. The S&P 500 Index (SPX) last week increased 2 percent and the STOXX Europe 600 (SXXP) climbed 1.9 percent in the period.

Dubai, the second-largest of seven emirates that make up the U.A.E., relies on trade, tourism and property for growth. Economic growth may reach as much as 5 percent in 2012 from 3.4 percent last year, Al Ittihad reported last month, citing the director general of the emirate’s chamber of commerce and industry.

About 87 million shares traded in Dubai today, compared with a 12-month daily average of 137 million shares. The Islamic holy month of Ramadan, when Muslims fast from sunrise to sunset and business slows, will start later in July. Emaar climbed the most since June 5 to 2.85 dirhams. Dubai Islamic advanced 1.1 percent, the most since May 29, to 1.87 dirhams.

Kuwait Cabinet Resigns

Oil may rise this week after the European Union imposes new sanctions on crude purchases from Iran, the second biggest producer in OPEC, according to 16 of 42 analysts in a Bloomberg survey. The EU agreed to ban the purchase, transportation, financing and insurance of Iranian oil beginning today over concerns about Iran’s nuclear program. The Islamic republic says its atomic work is peaceful.

Elsewhere in the Gulf region, Kuwait’s gauge rallied 1.1 percent. The country’s Emir Sheikh Sabah al-Ahmad Al-Sabah accepted the resignation of the cabinet, which will be a caretaker government until a new cabinet is appointed, the official Kuwait News Agency reported today.

Qatar’s QE Index (DSM) climbed 1 percent and Abu Dhabi’s ADX General Index (ADSMI) gained 0.5 percent.Bahrain’s gauge declined 0.6 percent and Saudi Arabia’s Tadawul All Share Index (SASEIDX) fell 0.1 percent after yesterday rising 1.9 percent. Oman’s gauge fell 0.5 percent. Egypt’s stock market is closed for a holiday.

In Israel, the benchmark TA-25 Index (TA-25) surged 2.3 percent at 3:33 p.m. in Tel Aviv as the government approved a plan to raise the 2013 budget deficit target and set a gradually decreasing limit through 2019.

Delek Group Ltd. (DLEKG), controlled by billionaire Isaac Tshuva, surged the most in more than a month, rising 4.9 percent to 597.9 shekels, after the company filed an offer to purchase shares it doesn’t already own in Delek Energy Systems Ltd. (DLEN)

The yield on the 5.5 percent benchmark Mimshal Shiklit government bonds due January 2022 fell one basis point, or 0.01 percentage point, to 4.31 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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