Emaar Properties PJSC climbed the most in three months, extending its winning streak to six days, after the developer of the world’s tallest tower announced a project near the planned site for the World Expo in 2020.
The stock rallied 5.1 percent, the biggest increase since Sept. 10, to 7.36 dirhams at the close in Dubai. It was the biggest gainer by index points on the benchmark DFM General Index, which rose 1.9 percent.
Emaar said yesterday it signed an agreement with Dubai World Central, the proposed home to the world fair, to build a development including a mall, golf course and hotels. Dubai, the region’s hub for commerce, tourism and trading, will need to invest almost 6 billion euros ($8.3 billion) on infrastructure projects before the Expo, Sheikh Ahmed bin Saeed Al Maktoum, head of Dubai’s Supreme Fiscal Committee and chairman of Emirates airline, said last month.
“Emaar is a primary beneficiary of the new development pipeline,” Mohammad Kamal, a Dubai-based analyst at Arqaam Capital Ltd., said by e-mail today. Details of the new project “remain unclear in terms of allocation between hotels, sales product and leisure facilities, but we expect a significant contribution to Emaar’s net asset value.”
Dubai’s property companies are benefiting from an economic recovery and a rebound in construction as the emirate won the right to host the World Expo. The fair may boost gross domestic product by 0.5 percentage point annually and 2 percentage points in 2020, Bank of America Corp. said in September.
Emaar also plans to start the sale of 136 serviced apartments at its Vida Residence in the emirate from Dec. 14 in Dubai, Abu Dhabi, Singapore and Riyadh. The shares of the company, which has the biggest weighting of about 22 percent on Dubai’s index, were started with buy at Egypt-based Naeem Brokerage today.
The developer’s gains also spurred Aldar Properties PJSC and Union Properties PJSC, which were initiated with accumulate at Naeem. Aldar, the biggest developer in Abu Dhabi, gained 3.6 percent, while Union Properties rose 2.9 percent in Dubai.
The fact Abu Dhabi will be spending billions of dollars at the same time as Dubai “is reinforcing the case to buy developers, contractors and banks,” Sanyalaksna Manibhandu, a senior analyst at NBAD Securities LLC, said by phone today.