Dubai’s benchmark stock index rose to the highest in almost two weeks on bets the emirate will win the right to host the World Expo 2020. Shares in other Gulf markets climbed as Iran signed a nuclear accord.
The DFM General Index (DFMGI) climbed 0.8 percent to 2,913.89 at 10:56 a.m. in the emirate, bringing the gain for the year to 79 percent. Emaar Properties PJSC, builder of the world’s biggest shopping mall by floor space, rose 0.3 percent and Dubai Investments PJSC (DIC) was poised for the highest close since October 2008. Kuwait’s gauge advanced 0.5 percent and Qatar’s increased 0.7 percent.
Dubai is one of four cities competing to host the World Expo and results will be announced Nov. 27. A successful bid would be a milestone in Dubai’s recovery from a property crash in 2009 that wiped as much as 65 percent off home prices. It would boost economic growth by 0.5 of a percentage point per year and by about 2 percentage points in 2020, Bank of America Corp. said in a Sept. 26 report.
“The market is completely focused on is Expo 2020 decision,” said Mohammad Ali Yasin, managing director at Abu Dhabi-based NBAD Securities, “I don’t see an immediate impact” on the markets in the United Arab Emirates from Iran as it “wasn’t the risk market was seeing or fearing.”
Iran and world powers struck an accord that broke a decade-long diplomatic stalemate, setting limits on the Islamic Republic’s nuclear program in exchange for relief from sanctions. The agreement with Iran, which is separated from the Gulf by the Strait of Hormuz, is the first to be reached since the country’s nuclear program came under international scrutiny in 2003, and may help avert a nuclear arms race in the region.
Abu Dhabi’s ADX General Index and Oman’s MSM30 Index were little changed, while Bahrain’s measure lost 0.4 percent. Emaar climbed to 6.28 dirhams and Dubai Investments, which holds stakes in more than 40 businesses, rose 0.9 percent to 2.24 dirhams.
The Iran accord “is not a total surprise,” said Fadi Al Said, head of investments at ING Investment Management Middle East Ltd. “Some of it has already been priced in.”
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