Dubai’s benchmark stock index, the world’s best-performing gauge this quarter, rose to the highest level since 2009 on bets a tourism recovery will help boost corporate earnings. Israeli shares dropped for a third day.
Air Arabia PJSC jumped to the strongest level since November 2009. The Middle East’s biggest discount airline is scheduled to report earnings tomorrow. Dubai Islamic Bank PJSC, the United Arab Emirates’ largest Shariah-compliant lender, gained 2.1 percent. The benchmark DFM General Index advanced 0.3 percent to 2,185.02, the highest since November 2009, at the close in Dubai. The measure has surged 19 percent this quarter, the best performer among 94 indexes tracked by Bloomberg.
Dubai plans to double the number of visitors to 20 million by 2020 and triple the industry’s annual revenue to 300 billion dirhams ($82 billion), the government said this month. Some 66 million shares in Sharjah, U.A.E.-based Air Arabia were traded today, 3.3 times the three-month daily average, data compiled by Bloomberg show.
The carrier is benefiting from “the economic recovery in the U.A.E., and investors’ expectations of further strength in passenger numbers and transport volumes,” Amer Khan, a Dubai-based director at Shuaa Asset Management, said today.
The company, which said last month first-quarter passenger traffic surged 18 percent to a record 1.45 million, may report a 9.5 percent increase in quarterly net income, according to an estimate by Securities & Investment Co. Air Arabia will take delivery of 10 planes next year, Chief Executive Officer Adel Ali said May 7. The shares, the second most-actively traded in Dubai, advanced 2.8 percent to 1.1 dirhams.
Dubai Islamic Bank, the biggest gainer on the index, climbed to 2.87 dirhams after completing a share-swap agreement with Tamweel PJSC. The lender’s first-quarter profit last month, beat analysts’ estimates.
Banks in Abu Dhabi also rallied, pushing the benchmark ADX General Index up 1.1 percent to 3,404.46, the highest since November 2008. First Gulf Bank PJSC, the largest gainer, rose 2.1 percent, the most since April 23, to 14.75 dirhams.
In Israel, a pledge by the Finance Minister to cut tax breaks for multinational companies helped push the benchmark TA-25 Index down 0.8 percent to 1,193.68 as of 4:10 p.m. in Tel Aviv, as 21 stocks dropped. The move stoked concern of a “possible further backlash against corporations and that’s creating jitters in the market,” said Steven Shein, an analyst at Psagot Investment House Ltd.
The yield on the nation’s benchmark 4.25 percent bonds maturing in 2023 rose five basis points, or 0.05 percentage point, to 3.54 percent.
Elsewhere in the Middle East, Saudi Arabia’s Tadawul All Share Index, the largest Arab bourse, fell 0.4 percent, while Qatar’s QE Index was little changed. Kuwait’s SE Price Index rose 0.8 percent, taking this year’s rally to 32 percent. Oman’s MSM30 Index increased 0.2 percent and Bahrain’s gauge climbed 0.4 percent.
Egyptian shares climbed for a fifth day, advancing 0.8 percent to 5,446.68, the highest close since March 3.