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Abu Dhabi Shares Rise Most in Week on 2011 Earnings Optimism

Feb. 9 (Bloomberg) -- Abu Dhabi’s shares rose the most in a week amid speculation earnings at the emirate’s biggest real-estate companies will improve and they will benefit from infrastructure spending plans.

Aldar Properties PJSC, Abu Dhabi’s biggest property developer, rose for a third day this week. Sorouh Real Estate, the emirate’s second-largest developer, rallied 3.4 percent. Abu Dhabi’s ADX General Index rose 0.1 percent, the most since Feb. 2, to 2,466.74 at the 2 p.m. close in the emirate, trimming this week’s drop to 0.4 percent. The Bloomberg GCC 200 Index fell 0.1 percent.

“Sentiment for real-estate stocks has improved slightly as soon to-be-announced earnings are expected to be substantially better for both Aldar and Sorouh,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank by assets.

Aldar, which obtained 16.8 billion dirhams ($4.6 billion) from Abu Dhabi’s government by selling assets in December, may post a 2011 profit of 494 million dirhams after a loss of 2.4 billion dirhams a year earlier, according to the mean estimate of eight analysts on Bloomberg. Sorouh may report next week full-year profit almost tripled to 379 million dirhams, according to the mean estimate of six analysts on Bloomberg.

Aldar shares rose 3.2 percent to 97 fils. Sorouh climbed to 92 fils, the highest close since Dec. 11.

Property Prices

About 80 million shares traded in Abu Dhabi today, compared with a 12-month daily average of about 62 million shares.

Abu Dhabi, the oil-rich emirate transforming itself into a business and cultural hub, plans to resume projects including branches of the Louvre and Guggenheim museums after reviewing their viability, the government said in January.

“The executive council decision has helped build momentum in Abu Dhabi’s real-estate stocks, though some macro issues still remain in the sector,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi.

Real-estate prices have fallen more than 60 percent in Dubai and 45 percent in Abu Dhabi from 2008 peaks after the global credit crisis caused banks to curtail lending and speculators left the market. Developers completing contracts are supplying thousands of homes and offices at a time when demand is dropping.

In Dubai, Arabtec Holding Co., the U.A.E.’s biggest construction company, rallied 3 percent to 2.74 dirhams, the highest close since October 2009. The stock is up 72 percent this year amid speculation the company will benefit from regional infrastructure spending.

Dubai’s DFM General Index advanced 0.3 percent. Oman’s benchmark stock index and Qatar’s QE Index were little changed. Bahrain’s measure gained 0.1 percent and Kuwait’s gauge rose 0.2 percent. Saudi Arabia’s market was closed for the weekend.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

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

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