Nov. 29 (Bloomberg) -- Emaar Properties PJSC rose to the highest level in more than seven weeks after the developer said it will expand the Dubai Mall, among the world’s biggest, boosting the outlook for earnings growth.
The shares of the stock with the heaviest weighting on Dubai’s gauge climbed 1.6 percent to 3.76 dirhams, the highest since Oct. 7, at the close in the emirate, bringing an advance this month to 4.2 percent. The gain helped push Dubai’s DFM General Index up 1.2 percent, the most since Oct. 1, to 1,607.90. Emaar’s 14-day relative strength index climbed to 60 today. A level of 70 indicates to some analysts that a security is poised to decline.
Emaar’s $20 billion Downtown Dubai project, where the Dubai Mall is situated, is centered around Burj Khalifa, the world’s tallest tower. Emaar said today it will expand the Dubai Mall by adding a shopping boulevard lined with restaurants, water attractions as well as luxury homes, serviced apartments and a hotel.
“The city is busy again and Emaar benefits from various sectors, including real estate, hospitality and retail,” said Nabil Al Rantisi, managing director of brokerage at Abu Dhabi-based Menacorp. “Those segments have boomed recently, so this will reflect on the balance sheet of Emaar.”
The developer said in February it will add 1 million square feet (92,903 square meters) to the Dubai Mall as it capitalizes on retail and hospitality growth. The company may post a 21 percent gain in full-year profit to 2.17 billion dirhams ($591 million), according to the mean estimate of 11 analysts on Bloomberg.
Emaar, the emirate’s biggest publicly traded developer, will also cooperate with Dubai Holding LLC to build a new district in the emirate that includes an even bigger mall, the Dubai government said this month. The project, known as MBR City, is designed to include gardens bigger than London’s Hyde Park, a theme park and art galleries. Another development announced this week will have five theme parks set to cost 10 billion dirhams.
The economy of Dubai, one of seven sheikhdoms that comprise the United Arab Emirates, is making a comeback as several state-linked companies restructured or paid debt this year. Economic growth will accelerate to 5 percent this year from 3 percent in 2011, according to government forecasts.
Shares of Emaar surged 24 percent in the third quarter, making it the best performer on Dubai’s gauge in the period. The stock is up 46 percent in 2012, compared with an advance of 19 percent for the DFM General Index. Twelve analysts recommend investors buy Emaar shares while four have a hold rating on the stock.
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