Shares in Dubai advanced for the first time in four days, led by Emaar Properties PJSC, after rival Nakheel PJSC reported a 54 percent jump in profit.
The DFM General Index (DFMGI) advanced 1.5 percent to 4,575.09 at the close in Dubai. Emaar, which has the biggest weighting on the index at 23 percent, gained 3.8 percent. Arabtec Holding Co., the U.A.E.’s biggest listed construction company, climbed 1.7 percent, taking this year’s gain to 105 percent.
Nakheel, developer of the man-made islands off Dubai’s coast, said yesterday first-half profit surged to 1.85 billion dirhams ($504 million). Dubai-based property and construction companies are benefiting from a real estate-led economic recovery in the emirate, where, according to Cluttons LLC data on Bloomberg, prices for mid-range apartments rose 43 percent last year.
“Some great numbers reported from Nakheel” yesterday and “this will imply that earnings for the other real estate companies, namely Emaar (EMAAR), could be very good as well,” Ramez Merhi, director of asset management at Dubai-based Al Masah Capital, which manages $545 million, said by e-mail.
Emaar will report second-quarter net income of 936 million dirhams, up from 675 million dirhams a year earlier, according to the mean of two analysts in a Bloomberg survey. The company does not say when it will release earnings.
Property and construction companies are the main beneficiaries of about $8 billion of infrastructure spending planned as Dubai prepares to host World Expo 2020.
Arabtec shares reached 7.74 dirhams in May before a selloff took them as low as 2.35 dirhams on July 1. They traded at 4.20 dirhams today.
“Arabtec continues to see retail interest, with retail clients hopeful to see the stock back to where it traded before the sharp drop,” Ahmed Shehada, head of advisory and institutions at NBAD Securities LLC, said by e-mail.
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