Abu Dhabi’s benchmark stock index advanced to the highest level in more than three years as the emirate’s two biggest real-estate companies prepare to meet this week to vote on a merger.
Aldar Properties PJSC surged 5 percent and Sorouh Real Estate Co. gained the most in more than three weeks. The developers, which were the most traded by value on the gauge, will hold shareholder meetings on Feb. 21 to vote on the planned combination. The ADX General Index rose 1.1 percent to 2,968.54, the highest since November 2009, at the close in Abu Dhabi.
Shares of Aldar tumbled 14 percent through yesterday since the developer’s board approved on Jan. 21 a plan to offer 1.288 shares for each Sorouh stock in a government-backed acquisition to create Middle East’s third-largest publicly traded developer. Sorouh’s stock has advanced 8 percent since the announcement as investors deemed the terms of the merger to favor the smaller of the two developers.
“Investors are accumulating before the meeting this week,” said Waleed Al Khateeb, Dubai-based senior finance manager at Daman Securities LLC. “There was some excessive selling after the merger was approved last month.”
The combination comes as Abu Dhabi tries to revive its property market after prices fell more than 50 percent during a crash in the United Arab Emirates. Aldar’s 2012 profit more than doubled, while Sorouh posted a 32 percent advance.
Aldar’s stock climbed the most since Jan. 8 to 1.47 dirhams while Sorouh increased 2.9 percent, the biggest gain since Jan. 23, to 1.76 dirhams. About 58 million Aldar shares were traded, almost triple the three-month daily average.
Elsewhere in the Gulf Cooperation Council, Kuwait’s gauge gained 0.1 percent and Bahrain’s measure advanced 0.3 percent. Dubai’s DFM General Index and the Bloomberg GCC 200 Index of the GCC’s most-traded shares slipped 0.2 percent.
The Tadawul All Share Index also fell 0.2 percent after a six-day rally, Qatar’s QE Index slipped 0.1 percent and Oman’s MSM30 Index was little changed. In North Africa, Egypt’s benchmark EGX 30 Index decreased 0.4 percent in its third day of declines.
Israel’s TA-25 Index advanced 0.3 percent at the close in Tel Aviv. The yield on the government’s benchmark 4.25 percent bonds due 2023 fell two basis points, or 0.02 percentage point, to 4.07 percent.