Dubai Stocks Jump to Highest Since 2009 as Drake & Scull SurgesAlaa Shahine
Dubai’s benchmark stock index surged to the highest level in more than three years amid investor speculation first-quarter corporate profits may beat estimates and as banks repaid state loans ahead of time.
The DFM General Index climbed 2.4 percent to 1,962.92, the highest since November 2009, at the close in the emirate. Dubai Islamic Bank PJSC, the biggest Shariah-compliant lender in the United Arab Emirates, advanced the most since December. 2009. Drake & Scull International PJSC rose to the highest since 2012 amid takeover speculation, which the company denied.
Dubai Islamic, which raised $1 billion in perpetual sukuk last month to boost capital, has surged 17 percent since its April 7 announcement that it repaid a 3.75 billion dirham ($1 billion) Finance Ministry loan it took during the global financial crisis. Drake & Scull may report a 10 percent increase in profit this year, after a 42 percent drop in 2012, according to the mean estimate of nine analysts on Bloomberg.
“Dubai Islamic benefited a lot from the fact that they were able to raise perpetual sukuk and then they paid back the government’s bailout money,” said Mohammed Ali Yasin, managing director of NBAD Securities in Abu Dhabi. He also said there is speculation that some companies, including Drake & Scull, may be “taken over.”
Drake & Scull, the Dubai-based company that supplies engineering services to the construction industry, isn’t subject to any takeover bids, Zeina Tabari, chief corporate affairs officer, said by phone after the market closed. The gain in shares could be driven by investor optimism before first-quarter results or expectations of future contracts.
The shares climbed 5.2 percent to 81.6 fils, the highest since October, 2012. About 371 million shares were traded in Dubai today, compared with an 12-month daily average of 611 million shares, according to data compiled by Bloomberg.
Dubai Islamic shares soared 6.7 percent to 2.56 dirhams. Emaar Properties PJSC, the developer of the world’s tallest skyscraper in Dubai, rose 2.1 percent to 5.45 dirhams, the highest since March 19, before shareholders meet today. The company’s board has recommended a 10 fils per share dividend.