Dubai Stocks Advance to Four-Month High on Bond Sale Plans, Global Growth
Dubai shares rose to the highest in four months, leading a Middle East rally, after the emirate’s government was said to be planning a $1 billion bond sale and as global markets advanced, boosting investor confidence.
Emaar Properties PJSC, the developer of the world’s tallest skyscraper, increased 2.7 percent and Dubai Financial Market, the only Gulf Arab stock market to sell shares to the public, advanced the most in almost two weeks. The DFM General Index gained 1.6 percent to 1,716.83, the highest level since May 13. Egypt’s EGX 30 Index rose 0.3 percent.
The bond is positive for the market as “there will be direction on the new pricing of risk in Dubai,” said Yazan Abdeen, a fund manager with ING Middle East, which oversees $90 million in Middle East North Africa assets. “Companies, especially banks, will benefit from that liquidity, plus it will be an ice breaker for further issuances.” Gains in global shares also helped push up local stocks, Abdeen said.
Dubai’s government plans to raise about $1 billion from a bond sale this week, two bankers familiar with the plan said Sept. 23. The bond would tap the market for the first time since state-owned Dubai World’s $24.9 billion debt restructuring. HSBC Holdings Plc, Deutsche Bank AG and Standard Chartered Plc were hired to manage the sale of five- to seven-year bond, the bankers said, declining to be identified because the plan hasn’t been made public. The deal is likely to be completed tomorrow, one of the bankers said. A Dubai government spokeswoman declined to comment when contacted by Bloomberg today.
The Standard & Poor’s 500 Index increased 2.1 percent last week after a government report showed orders for durable goods excluding transportation equipment advanced in August at twice the pace forecast by economists. Shares in Europe rose as German business confidence unexpectedly increased to the highest level in more than three years in September.
Crude oil soared 1.7 percent on Sept. 24 to $76.49 a barrel as the dollar fell against the euro, boosting the appeal of commodities as an alternative investment. The six nations of the Gulf Cooperation Council supply about a fifth of the world’s oil.
Emerging Market Funds
Emerging-market stock funds drew the most inflows in seven weeks and commodity funds posted the best week since early June amid speculation central banks globally will provide additional stimulus, research company EPFR Global said Sept. 24. Stocks have rallied this month after central bankers from Japan to the U.K. indicated that further stimulus may be in store. The U.S. Federal Reserve also said slowing inflation and sluggish growth may prompt more action.
Emaar, which has the heaviest weighting in Dubai’s index, climbed to 3.87 dirhams, the highest since May 10. Dubai Financial Market rose 4 percent to 1.82 dirhams. Arabtec Holding Co., the U.A.E.’s biggest construction company, soared 6.3 percent to 2.02 dirhams, the highest since June 2.
Qatar’s QE Index gained 0.3 percent. Abu Dhabi’s ADX General Index increased 0.7 percent and Oman’s MSM30 Index advanced 0.9 percent. Kuwait’s gauge slipped 0.2 percent. Bahrain’s measure and Saudi’s Tadawul All Share Index were little changed.
The TA-25 Index of Israeli stocks rose 0.3 percent to 1,231.01, the highest since April 14. Tel Aviv markets closed early at 2:45 p.m. in observance of a holiday.
The yield on Israel’s benchmark Mimshal Shiklit note due January 2020 fell 4 basis points to 4.46 percent. The yield has gained 25 basis points this month as traders gear up for an interest rate increase.
Central Bank Governor Stanley Fischer is likely to raise the rate to 2 percent tomorrow, according to 12 of 16 economists surveyed by Bloomberg. The other four expect the rate to remain unchanged.
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