Dubai Shares Rebound as Amlak’s New Debt Agreement Boosts Emaar

Dubai stocks ended three days of declines after a mortgage provider part-owned by Emaar Properties PJSC proposed a new debt deal, boosting shares in the developer of the world’s tallest tower.

The DFM General Index gained 3.2 percent to 4,067.67 at the close, after declining as much as 5.4 percent. Emaar, which has the biggest weighting on the index and holds 45 percent of Amlak Finance PJSC’s shares, rallied 5.8 percent to 8.90 dirhams, ending a three-day rout. The lender is proposing an initial 20 percent payment to depositors, or about 2 billion dirhams ($545 million), and to repay the remaining debt owed over 12 years, its spokesman said by e-mail.

“Amlak’s news is positive for Emaar,” Nayal Khan, head of institutional sales and trading at the Naeem Holding brokerage in Dubai, said by e-mail. “It’s exposure to Amlak was considered impaired by the market.”

Real estate companies in Dubai have benefited from a rebound in home prices, almost six years after the global credit crisis triggered one of the world’s worst property crashes. Prices for mid-range apartments in the emirate rose 43 percent last year, and another 4.7 percent so far this year to May, according to Cluttons LLC data compiled by Bloomberg.

Bear Market

Amlak was one of the two main mortgage providers in the emirate before 2009. The lender, which offers mortgages that comply with Islamic law, is restructuring more than $2 billion of loans. Its shares have been suspended from trading since 2008. Depositors have been given two months from a June 5 meeting to assess and accept the package, the spokesman said, declining to be identified because of company policy.

The Dubai market’s 14-day relative-strength index rose to 35.9 today from a low of 27.5 on June 24. A reading below 30 indicates to some technical analysts that an asset is oversold and poised to reverse. The index entered a bear market last week after slumping 20 percent to June 23 from a high in May. The measure declined 22 percent last month.

Emirati investors were net sellers of stocks for every trading day from June 16, according to data on the exchange’s website. They sold 169 million dirhams today, the most since June 24. Non-Arabs were the biggest net buyers today, having bought 88.6 million dirhams in shares, the data show.

Dubai Investments PJSC surged 11 percent, the most since Oct. 2, to 3 dirhams. Arabtec Holding Co., the United Arab Emirates’ biggest listed builder, climbed 10 percent to 2.88 dirhams.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE