Dubai’s benchmark equity gauge rose for the first time in four days as investors speculated the worst plunge since 2009 amid concern over Syria was overdone.
The index rose 0.3 percent to 2,523.13 at the close in Dubai, after dropping 8.4 percent in the previous three days, the most over such a period since December 2009. Islamic mortgage company Tamweel PJSC (TAMWEEL) jumped the most in more than a week while Emirates Integrated Telecommunications Co. (DU), the phone company known as Du, added the most in more than a month.
Share prices in Dubai, one of seven sheikdoms that make up the United Arab Emirates, have surged 69 percent this year until Aug. 26 as the economy recovered from the impact of a property crash that was sparked by the global credit crisis. Dubai’s benchmark measure trades at an average price-to-book ratio of 1.01 compared with 2.02 in neighboring Saudi Arabia and 1.7 for Qatar. France and the U.K. backed off today from a military strike on Syria.
After the strong selloff “some names became cheap and investors were tempted to cherry pick,” Montasser Khelifi, the Dubai-based senior manager for global markets at Quantum Investment Bank Ltd., said by e-mail today. Politically, “the situation remains risky, but Dubai’s rise this year has been backed by a strong economic recovery and by good results from the companies in the first half,” he said.
Prime Minister David Cameron backed down from asking lawmakers for immediate support today for possible U.K. military strikes on Syria after the Labour opposition demanded a delay until United Nations inspectors report on the alleged use of chemical weapons. France needs proof before acting on Syria, Najat Vallaud-Belkacem, cabinet member and spokeswoman for the French government, said today on I-tele.
Tamweel, majority owned by Dubai Islamic Bank PJSC (DIB), rose 5.4 percent to 1.18 dirhams. Du advanced 2.2 percent to 6.4 dirhams. Emaar Properties PJSC (EMAAR), Dubai’s biggest publicly traded developer, climbed 0.9 percent to 5.75 dirhams after falling by 8.4 percent over the past two days.
Abu Dhabi’s benchmark index was little changed, Oman’s measure added 0.8 percent and Egypt’s EGX30 increased 0.8 percent. Saudi Arabia’s Tadawul All Share Index added 0.2 percent. Kuwait’s measure fell 1 percent, Bahrain’s index declined 0.1 percent, while Qatar’s gauge rose by 0.8 percent.
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