Aldar Properties PJSC (ALDAR) and Sorouh Real Estate PJSC, the Abu Dhabi companies set to merge next months, soared the most in almost eight years.
Aldar surged 15 percent, the most since September 2005, to 1.95 dirhams as trading volume of the shares jumped to almost five times the three-month daily average. Sorouh, the smaller of the two, also gained 15 percent, the most since the stock was listed in December 2005. Trading volumes soared almost six fold. The benchmark ADX General Index (ADSMI) gained 1.4 percent to the highest since October 2008. The measure has rallied 35 percent this year.
Shares in the United Arab Emirates are advancing, with Dubai’s benchmark climbing 45 percent this year, as the economy and property prices recover. Shares of Dubai-based Emirates NBD PJSC (EMIRATES) have more than doubled this year and are up 16 percent this month, while those of National Bank of Abu Dhabi are up 32 percent in 2013. Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower, gained 3.5 percent as it rose for a fourth day.
Stocks of large companies in Dubai have witnessed a lot of activity in the past few weeks without news that would justify the moves, said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai. It seems speculative investors are now focusing on large companies in Abu Dhabi as “the momentum in the U.A.E. markets is encouraging speculators.”
A spokesman for Aldar, who asked not to be identified in line with company policy, said the developer had no comment and hadn’t announced any developments that would result in the share’s surge. A spokesman for Sorouh (SOROUH) didn’t immediately respond to calls seeking comment.
Regulatory changes in neighboring Saudi Arabia (SASEIDX) may have led to the increased activity in the U.A.E.’s markets, said Al Said. Saudi Arabia’s Capital Market Authority’s board on May 13 issued a resolution to limit the stock price fluctuation on the first trading day of a share to 10 percent.
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