Abu Dhabi’s shares rose for a fifth day after the United Arab Emirates central bank said growth in non-oil industries may accelerate to 4 percent this year, boosting the outlook for company earnings.
Abu Dhabi Islamic Bank PJSC, the U.A.E.’s second-biggest Shariah-compliant bank, advanced for a fourth day. First Gulf Bank PJSC, the lender controlled by Abu Dhabi’s ruling family, climbed to the highest since Aug. 27. Abu Dhabi’s ADX General Index rose 0.2 percent to 2,596.73, the highest since Aug. 26, at the close in the emirate. The measure gained 1.7 percent during the five-day rally. Dubai’s DFM General Index and Qatar’s gauge were little changed, while Oman’s index fell 0.7 percent.
The central bank gave its forecast in a report on its website yesterday. The country, looking to reduce its reliance on oil, wants to boost non-oil exports to 11 percent of GDP by 2030 from 1 percent now, the National reported this week, citing the director of foreign trade and exports at the Abu Dhabi Department of Economic Development. The IMF forecasts non-oil industry growth of 3.5 percent, up from 2.7 percent in 2011.
“The central bank projections are higher than International Monetary Fund estimates, and there is positive sentiment toward corporate earnings in the third quarter,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “The push to implement Basel III next year” also helped push stocks up, Farhat said.
The central bank said it would seek to protect the banking system from future shocks by installing a discount window to improve “liquidity management” within the U.A.E. and support the development of collateralized debt markets. The measure comes before tougher rules on banks take effect next year under a set of regulations known as Basel III.
Abu Dhabi Islamic climbed 0.9 percent to 3.28 dirhams, the highest since Aug. 26. First Gulf Bank increased 0.2 percent to 9.84 dirhams.
The Bloomberg GCC 200 Index increased less than 0.1 percent and Saudi Arabia’s Tadawul All Share Index gained 0.2 percent. Kuwait’s measure and Bahrain’s gauge fell 0.4 percent.