Dubai Stock Index Climbs to 3-Week High as Syria Concern EasesZainab Fattah and Claudia Maedler
Dubai’s stock index surged to the highest in almost three weeks as the threat of an imminent attack on Syria eased after the U.S. and Russia reached an agreement to eliminate the country’s chemical weapons.
The DFM General Index climbed 4.8 percent to 2,659.93, the highest close since Aug. 26. The measure had plunged as much as 15 percent since reaching a five-year high on Aug. 25 on concern the U.S. would launch a military strike against Syria. Emaar Properties PJSC, the stock with the biggest weighting on the index, jumped 4.7 percent, while Deyaar Development PJSC surged
9.1 percent. Israel Corp. led gains in Tel Aviv.
Dubai’s stocks posted the biggest swings in the world in the past month on concern a military strike would have repercussions in the oil-rich Middle East. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov reached agreement yesterday on a framework for finding, securing and destroying Syrian President Bashar al-Assad’s stocks of poison gas. The deal calls for early signs of progress, giving Assad one week to submit an inventory of his toxic weapons, and calls for inspections in Syria by November.
“The Syria crisis is well behind us now and the markets have adjusted to those dynamics,” said Nayal Khan, head of institutional equity sales and trading at Naeem Brokerage. “A 15 percent to 20 percent downside since Syria was announced was a bit too much, certainly for Dubai.”
Dubai’s measure has climbed 64 percent this year, more than any of the 50 largest equity markets, as the Persian Gulf business hub recovers from the credit crisis that led to a crash in property prices. Economic growth in the emirate is set to accelerate to 4.6 percent, on average, through 2015 helped by a rebound in tourism, trade and transport, government estimates show. That’s more than twice as fast as the prior four years.
The Dubai index’s 30-day volatility, a measure of fluctuations in Dubai’s equities gauge, rose to 44 today, the highest since January 2010 and the most among 72 indexes tracked by Bloomberg. That’s more than 10 points above the Philippines.
Saudi Arabia’s All Share Index and Abu Dhabi’s gauge gained
1.8 percent. Qatar’s measure rose 1.7 percent, Kuwait’s 1.9 percent, Oman’s 0.7 percent and Bahrain’s 0.3 percent. Egypt’s EGX 30 climbed 0.5 percent.
In Israel, the TA-25 Index gained 1.9 percent at the close in Tel Aviv as Israel Corp. jumped 9 percent, the most since July 2009, to 1,755 shekels. The shares soared along with those of its Israel Chemicals Ltd. unit, which advanced 6.4 percent on speculation that a possible change in ownership of Russian potash producer OAO Uralkali could help stabilize prices of the crop nutrient.
Israel’s government bonds were unchanged, with the yield on the benchmark 4.25 percent notes due March 2023 at 3.98 percent.
Dubai shares are also benefiting ahead of the emirate’s Citiscape real-estate exhibition and amid expectations the sheikhdom will win the right to host the World Expo 2020, Khan said. “Dubai is miles ahead in terms of infrastructure and hotel room availability by 2020,” he said.
Dubai is bidding against cities including Izmir in Turkey, and Sao Paulo to host the exhibition, which is held every five years and attracts millions of visitors. The winner will be announced in November.
Emaar rose to 6.02 dirhams, the highest since Aug. 26, and Deyaar soared to 61.4 fils, the highest since January 2010.