Dubai stocks rose to the highest in more than a week after Dubai Electricity & Water Authority said it will pay loans ahead of schedule and the Federal Reserve raised its assessment of the U.S. economy.
Emaar Properties PJSC, developer of the world’s tallest skyscraper, rose to the highest in more than a week. Dubai Islamic Bank PJSC climbed 0.5 percent. The DFM General Index gained 0.5 percent to 1,691, the highest since March 5, at the 2 p.m. close in the emirate. The cost of protecting Dubai’s debt against default dropped seven basis points to 348 today, according to data compiled by Bloomberg.
Dubai Electricity Chief Executive Officer Saeed Mohammed al-Tayer said yesterday the state-run utility will repay 1.2 billion dirhams ($327 million) in loans ahead of schedule. Default risk for Dubai has declined this year partly on pledges that the emirate’s main state-linked companies will manage to refinance debt without government support.
“The news that Dubai Electricity & Water will settle some of its debt early gave a boost to investors’ risk appetite,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “They were also encouraged by the gains in the U.S. market after the Fed” announcement, he said.
In the U.S., the Standard & Poor’s 500 Index rallied 1.8 percent yesterday after a report showed retail sales increased the most in five months and the Fed said it expects “moderate economic growth” and predicted the unemployment rate “will decline gradually.”
Emaar gained 2 percent to 3.11 dirhams, the highest close since March 4. Dubai Islamic, the United Arab Emirates’ largest bank complying with Shariah rules, rose to 2.18 dirhams.
The Bloomberg GCC 200 Index climbed 0.4 percent. Kuwait’s Stock Exchange Price Index advanced 0.3 percent. Abu Dhabi’s ADX General Index also increased 0.3 percent in its fifth day of gains. Saudi Arabia’s Tadawul All Share Index added 0.6 percent. Oman’s MSM 30 Index rose 0.3 percent, while Qatar’s QE Index was little changed. Bahrain’s BB All Share Index dropped 0.3 percent.