Feb. 28 (Bloomberg) -- Abu Dhabi’s benchmark stock index advanced to the highest level in more than five months after banks in the emirate reported improved quarterly earnings, boosting investor confidence. Dubai shares also rallied.
First Gulf Bank PJSC, the United Arab Emirates lender that reported better-than-expected profit last month, jumped 2.6 percent. Abu Dhabi Commercial Bank PJSC, the U.A.E.’s third-largest lender, surged to the highest since July. Abu Dhabi’s ADX General Index rose 0.7 percent to 2,593.22, the highest since Sept. 11 and the eighth day of gains, at the 2 p.m. close in the emirate. The Bloomberg GCC 200 Index gained 0.3 percent and Dubai’s DFM General Index soared 2.7 percent to 1,698.22, the highest since December 2010.
The banking sector has shown “great potential, which is the main trigger for economic recovery,” said Musa Haddad, head trader at the National Bank of Abu Dhabi PJSC’s asset-management group. “We are seeing momentum building upwards on strong volumes as well as new highs.”
Banks in the U.A.E., the second-largest Arab economy, are recovering from a slowdown in credit growth after the 2008 financial crisis triggered a slump in real estate prices, slowed tourism and investment banking revenue plunged. First Gulf, which is controlled by Abu Dhabi’s ruling family, said in January fourth-quarter profit rose 18 percent. The bank said it would pay a dividend of 1 dirham a share and one free share for every one held. Abu Dhabi Commercial said profit for the quarter climbed 39 percent on lending and reduced provisions.
First Gulf rose to 20 dirhams, the highest since September 2008. Abu Dhabi Commercial gained 0.6 percent to 3.19 dirhams, the highest since July 20.
About 158 million shares traded in Abu Dhabi today, compared with a 12-month daily average of about 67 million shares. The value of shares traded in neighboring Dubai soared to 755 million dirhams ($206 million) today, the highest since April 2010.
Saudi Arabia’s Tadawul All Share Index advanced for a ninth day, gaining 0.3 percent. Oman’s benchmark stock index gained 1.1 percent and Kuwait’s gauge increased 0.4 percent. Bahrain’s measure retreated 0.5 percent and Qatar’s QE Index fell 0.7 percent.
To contact the reporter on this story: Zahra Hankir in Dubai at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org