Dubai’s stock index rose the most in more than a month, led by property companies, as investors returned from a five-day holiday during which the U.S. resolved its budget standoff. Israeli shares advanced.
The DFM General Index advanced 2.8 percent, the most since Sept. 15, to 2,909.91 at the close in Dubai. Emaar Properties PJSC, the stock with the biggest weighting on Dubai’s index, climbed 3 percent as the company said it planned to announce a project in Iraq next week. Israel’s TA-25 Index rose 0.7 percent at the close in Tel Aviv as acting Bank of Israel Governor Karnit Flug was nominated to become the central bank head.
The Standard & Poor’s 500 Index surged last week as Republicans and Democrats agreed to raise the U.S. debt ceiling and reopen the federal government. With the debate about the budget and debt ceiling probably over for this year, investor attention will turn to earnings and the Federal Reserve’s schedule for tapering economic stimulus. Markets in the United Arab Emirates were closed last week for the Eid holiday.
“This is a bit of catch-up for MENA after global equities rallied post-U.S. debt deal,” said Julian Bruce, head of institutional trading at EFG-Hermes U.A.E. Ltd. in Dubai. “Closer to home there’s been a good deal of positive chatter on Cityscape and U.A.E. real estate market, and most punters now fully expect Dubai to secure a win for Expo 2020.”
Dubai’s measure has climbed 79 percent this year, more than any of the 50 largest equity markets, as the Persian Gulf business hub recovers from the credit crisis that led to a crash in property prices. Economic growth in the emirate is set to accelerate to 4.6 percent, on average, through 2015 helped by a rebound in tourism, trade and transport, government estimates show. That’s more than twice as fast as the prior four years.
The shares are also benefiting from investor demand for real estate in the emirate’s Citiscape property exhibition earlier this month and amid expectations the sheikhdom will win the right to host the World Expo 2020. The winner will be announced in November.
Emaar climbed to 6.15 dirhams, the strongest close since Aug. 26. The developer of the world’s tallest tower will announce details of a project in Erbil Oct. 27. Aldar Properties PJSC, Abu Dhabi’s biggest developer, surged 5.3 percent, as did Dubai’s Deyaar Development PJSC.
“We saw some general risk-off activity ahead of the long break in Emaar,” Bruce said. “I would expect it to be the beneficiary of some returning cash and probably remains short-term top-pick amongst U.A.E. large caps.”
Elsewhere in the Middle East, indexes in Saudi Arabia and Kuwait rose 1.9 percent and 1.8 percent, respectively. Qatar’s benchmark rose 0.3 percent, the Muscat’s MSM30 Index advanced 0.5 percent, Bahrain’s measure gained 0.8 percent and Egypt’s EGX 30 increased 1 percent. Abu Dhabi’s index was the only decliner in the Middle East, dropping 0.3 percent at the close after rising as much as 1.6 percent earlier.
Al Rajhi Bank, Saudi Arabia’s biggest listed lender, fell 1.9 percent after third-quarter profit retreated 8.1 percent, missing analysts’ estimates. Saudi Kayan Petrochemical Co. surged 9.6 percent, the most since May 2010, after the company posted its first profit since 2008.
In Israel, the yield on the nation’s bonds due March 2023 fell four basis points, or 0.04 percentage point, to 3.61 percent, the lowest since May 28. Flug was nominated to become the central bank governor on a permanent basis, Prime Minister Netanyahu’s office said today in a text message.