June 19 (Bloomberg) -- Air Arabia PJSC surged to the highest level in more than two weeks on bets Dubai’s tourism recovery will boost profit at the Middle East’s biggest no-frills airline.
Shares of the carrier advanced 2.7 percent to 1.16 dirhams, the highest level since June 2, at the close in the emirate. About 46 million shares were traded, more than double the three-month daily average. The stock was the second-biggest gainer on the benchmark DFM General Index, which rose 0.6 percent.
“The company is benefiting from the tourism recovery in Dubai,” said Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC. There are “expectations that second-quarter earnings will beat estimates” after first-quarter profit rose, he said.
Dubai plans to double the number of visitors to 20 million by 2020 and triple annual revenue from the industry amid an economic recovery, the government said last month. Air Arabia’s first-quarter passenger traffic rose to a record 1.45 million, the airline said in April. The company said June 10 it plans to start flights to the capital of Armenia in August, the fifth new route in 2013 and its 86th globally, from its hubs in Sharjah, United Arab Emirates as well as Egypt and Morocco.
The low-cost carrier may post an eight percent increase in full-year profit to 453 million dirhams ($123 million), according to the mean estimate of six analysts compiled by Bloomberg. First-quarter net income rose 20 percent to 59 million dirhams.
Six analysts recommend investors buy the shares, while five have a hold rating and one says sell, according to data compiled by Bloomberg.
To contact the reporter on this story: Sherine El Madany in Dubai at email@example.com