Dubai Shares Advance on Optimism MSCI Will Upgrade to EM Status

Dubai’s shares gained the most in more than a week on investor optimism the United Arab Emirates will be upgraded to emerging-market status at MSCI Inc. (MSCI)

Dubai Financial Market (DFM), the only publicly traded stock exchange in the Gulf Cooperation Council, advanced the most in a week. Dubai Investments PJSC (DIC) posted the biggest gain since June 2 with almost 60 million shares traded, or 1.6 times the three-month daily average. The DFM General Index climbed 0.6 percent, also the most since June 2, to 2,358.28. Abu Dhabi’s index rose 0.3 percent, while Qatar’s QE Index fell 0.2 percent.

The U.A.E. and Qatar are under consideration for a fifth year for a possible upgrade from frontier-market status at MSCI, whose indexes are tracked by investors managing about $7 trillion. A promotion could lead to about $370 million flowing into the U.A.E. and more than $430 million into Qatar, HSBC Holdings Plc (HSBA) said in a report dated May 31. MSCI will publish the results of the 2013 annual market classification review shortly after 11 p.m. central European summer time.

“Investors are betting on the upgrade of the U.A.E. stock markets to MSCI’s emerging market index,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities.

Shares in Dubai fell the most in more than a year yesterday on concern optimism over the MSCI decision may have gone too far. MSCI last year cited market accessibility issues related to custody, clearing and settlement for its decision not to upgrade the U.A.E.

Indexes in Dubai and Abu Dhabi are among the five best-performing equity measures this year out of 94 tracked globally by Bloomberg. The DFM General Index (DFMGI) has rallied 45 percent and Abu Dhabi’s ADX General Index is up 36 percent.

DFM shares rose 0.5 percent today, the most since June 5, as the trading volume rose to about 35 million shares, or 1.1 times the three-month daily average. Dubai Investments increased 2.7 percent.

To contact the reporter on this story: Sherine El Madany in Dubai at selmadany@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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