Feb. 23 (Bloomberg) -- Dubai’s shares rose to the highest level in almost 10 months as investors bought low-priced stocks on bets the Dubai economy is recovering and after corporate earnings topped analysts’ estimates.
Deyaar Development PJSC, the property company controlled by Dubai Islamic Bank PJSC, soared to the highest level in almost two years. Dubai’s DFM General Index rose 1.5 percent to 1,632.27 at the 2:00 p.m. close in the emirate, the highest level since April 28. Gulf Navigation Holding gained for a sixth day. Abu Dhabi’s ADX General Index and the Bloomberg GCC 200 Index added 0.2 percent. About 564 million shares traded in Dubai today, compared with the 12-month daily average of 114 million shares.
“The market is resilient and the move is more on the small-denomination-type shares,” said Haissam Arabi, the Dubai-based chief executive officer at Gulfmena Investments Ltd. “Investor interest is coming back, the valuations are good, the numbers that are coming out are better-than-expected and the banks are doing well,” he said.
Earnings of property companies based in Dubai are starting to recover after prices plunged more than 60 percent from their 2008 peak as speculators fled the market amid the global credit crisis. Emaar Properties PJSC, Dubai’s biggest publicly traded developer, is among companies whose quarterly profit beat estimates.
Deyaar, the biggest mover on the index today, has soared 75 percent since reporting on Feb. 4 it returned to full-year profit in 2011 following a loss a year earlier. The stock advanced 13.1 percent to 39.6 fils today, the highest since May 2010. Gulf Navigation, the most-active share by volume, soared 14.3 percent to 36.8 fils.
Dubai’s economy may expand as much as 5 percent this year after growing more than 3 percent last year, Sheikh Ahmed bin Saeed Al Maktoum, head of Dubai’s Supreme Fiscal Policy Committee, said this month.
The emirate’s benchmark, which tumbled 17 percent last year, has risen 21 percent this year and is the best performer in the six-nation Gulf Cooperation Council. The gauge trades at 10.1 times estimated 2012 earnings compared with 10.7 for the MSCI Emerging Markets Index.
“The drop last year was unjustified, so it is right that we have a re-rating or an upward correction to the unnecessary penalty that we paid last year,” Arabi said.
In Abu Dhabi, the measure rose to 2,539.2 points, extending its gains this year to 5.7 percent. Oman’s MSM 30 Index rose 0.4 percent, Qatar’s QE Index advanced 0.5 percent and Kuwait’s gauge climbed less than 0.1 percent. Bahrain’s BB All Share Index fell less than 0.1 percent and Saudi Arabia’s market was closed for the weekend.
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