Dubai’s benchmark stock index rose to its highest in almost five years after Emaar Properties PJSC, the emirate’s biggest publicly traded real-estate developer, reported third-quarter profit that beat analysts’ estimates.
The DFM General Index gained 0.5 percent to 2,923.98 at its 2 p.m. close, the highest since November 2008 and bringing its advance this year to 80 percent, the most among the 50 biggest equity markets globally. Emaar, whose 20 percent weighting is the heaviest in the gauge, climbed to the highest in two months. Arabtec Holding PJSC, the largest listed construction company, jumped to a more than a five-month high. Saudi Basic Industries Corp., the Middle East’s biggest petrochemicals maker, dropped the most in more than six months after reporting third-quarter profit that missed estimates.
Emaar, the developer of the world’s tallest tower in Dubai, reported a 50 percent increase in third-quarter profit as evidence mounted that the desert sheikhdom’s property crisis is waning. Real estate in the emirate is benefiting from a revival of Dubai’s economy, which is set to expand 4.6 percent per year, on average, between 2012 and 2015, more than twice the growth of the previous four years, according to government forecasts.
“Emaar’s results will be a catalyst for the market,” Sebastien Henin, an Abu Dhabi-based money manager at The National Investor, said by phone. “The revival of the Dubai real-estate market wasn’t expected at such a level and Emaar is extremely well-positioned as one of the key brands.”
The emirate’s biggest listed developer was at the center of Dubai’s real-estate drive over the past decade. Now Emaar is seeing higher profit as a surge in home prices follows a rebound in trade and tourism. Dubai home values climbed at the fastest pace in the world in the second quarter.
Emaar gained 1.8 percent to 6.21 dirhams, its highest close since Aug. 26. Net income rose to 581 million dirhams ($158 million), compared with the 389 million-dirham average profit estimate of six analysts compiled on Bloomberg. Arabtec advanced 0.7 percent to 2.73 dirhams, its highest since May 2012. Sabic fell 2.4 percent, the most since April 14, to 102.25 riyals.
The DFM General Index trades at a price-to-book value of 1.2 compared with 1.5 for the MSCI Emerging Markets Index, which has declined 2.7 percent this year, data on the Bloomberg shows.
Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index fell 0.6 percent. Kuwait’s gauge increased 0.4 percent, Qatar’s measure advanced 0.2 percent and Abu Dhabi’s ADX General Index rose 0.2 percent. Bahrain’s All Share Index lost 0.4 percent and Muscat’s measure retreated 0.3 percent. In Israel, the benchmark TA-25 Index rose 0.5 percent at the close in Tel Aviv.
Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic drugs, jumped 3.1 percent to 146.30 shekels in Tel Aviv after Citigroup Inc. recommended buying the shares. Bezeq Israeli Telecommunication Corp. advanced 1.6 percent to 6.25 shekels after dropping 8.2 percent last week.
The yield on Israel’s benchmark 4.25 percent notes due March 2023 slipped one basis point, or 0.01 percentage point, to 3.55 percent.