Dubai’s benchmark advanced to the highest in almost three weeks on speculation declines in the past month prompted by concerns over Europe’s debt crisis were overdone given the outlook for growth.
Arabtec Holding Co., the United Arab Emirates’ biggest construction company, gained 4.1 percent. Dubai Financial Market PJSC rose for a second day. The DFM General Index increased 0.5 percent to 1,340.70 at the 2 p.m. close in the emirate, the highest since Jan. 5. Dubai’s shares slumped to the lowest since May 2004 on Jan. 16, while Abu Dhabi’s fell to the lowest in three years. Abu Dhabi’s ADX General Index rose 0.5 percent.
“The recent decline was overdone and last week we reached new lows,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “We are in a gray zone. We know that valuations are good, but we suffer from a lack of visibility on the local and international levels.”
Emerging market stocks rose today as increasing home sales in the U.S. added to signs the world’s biggest economy is recovering, outweighing uncertainties over continuing debt negotiations in Greece. Economic growth in the U.A.E. will accelerate to 3.8 percent this year from 3.3 percent in 2011, according to International Monetary Fund forecasts.
The 31 companies in Dubai’s benchmark index are valued at about 7.9 times estimated earnings, data compiled by Bloomberg show. That compares with 10 times for the MSCI Emerging Markets Index. About 118 million shares were traded in the emirate today, compared with a 12-month daily average of about 100 million shares.
Arabtec rose to 1.79 dirhams, the highest close since November 2010. Dubai Financial Market, the only publicly traded Gulf Arab stock market, advanced 0.7 percent to 72.5 fils.
The Tadawul All Share Index advanced 0.2 percent. Oman’s MSM 30 Index increased 0.1 percent, while Kuwait’s KWSE Price Index declined 0.2 percent. Bahrain’s BB All Share Index was little changed, while Qatar’s QE Index retreated 0.4 percent and the Bloomberg GCC 200 Index slipped less than 0.1 percent.