Air Arabia PJSC, the only publicly traded airline in the United Arab Emirates, rallied the most in more than seven months as investors bet on stocks that have underperformed Dubai’s benchmark index.
The shares, the most traded on the DFM General Index today, advanced 8.9 percent to 1.47 dirhams at the close of trade in Dubai, and added as much as 11 percent earlier. The company said today in a statement that it started operations from the airport in Ras Al Khaimah, one of the seven emirates that comprise the U.A.E.
The DFM Index has strengthened more than 59 percent this year, the best performer among more than 90 gauges tracked by Bloomberg globally. Air Arabia has lost 5.2 percent. BlackRock Frontiers Investment Trust Plc, a $297 million fund run by the world’s biggest asset manager, said in February it cut holdings of U.A.E. equities on concern that gains have been exaggerated.
“Air Arabia is a laggard and it’s the only reason why retail investors are jumping on the bandwagon,” Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai, said by phone. Investors may be concerned that the market is “overheating now and they are looking at alternative names, and Air Arabia is one of them.”