DFM Gains as Volume Pickup to Help Exchange’s Net: Dubai Mover

Dec. 27 (Bloomberg) -- Dubai Financial Market PJSC advanced the most in almost three months on bets the only publicly traded Gulf Cooperation Council stock market will return to profit as trading volume picks up.

The shares advanced 3.7 percent, the most since Oct. 7, to 1.02 dirhams at the close in the emirate, bringing this year’s gain to 21 percent. The stock was the biggest gainer and third-most traded on the benchmark DFM General Index, which rose 0.4 percent. The company said last month its third-quarter loss narrowed to 1.71 million dirhams ($465,572) from 9.3 million dirhams a year earlier.

Dubai’s index is set to become the best performer in the six-nation GCC this year, with an advance of 19 percent compared with a gain of 3.7 percent for the region’s Bloomberg GCC 200 Index. Trading value on the bourse gained 47 percent in the first nine months, the exchange said in November. The company, whose shares tumbled 44 percent in 2011, may return to profit in 2012, the median estimate of three analysts on Bloomberg shows.

The stock rose amid “expectations of improved full-year results,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. The stock’s performance is partially “based on a technical rebound,” he added.

The bourse’s revenue relies in part on trading volumes, which have been subdued as foreign investors trimmed holdings of riskier assets as Europe’s debt crisis deepened. About 227 million shares were traded in Dubai today, compared with a 12-month daily average of 159 million shares. The DFM is one of three bourses operating in the United Arab Emirates, alongside Nasdaq Dubai and the Abu Dhabi Securities Exchange.

Two analysts recommend investors hold the shares while four advise selling it, according to data compiled by Bloomberg.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net