U.A.E. Shares Rally on Property Project Optimism as Qatar Climbs

Dubai stocks rallied the most in almost three months and Abu Dhabi’s index advanced on optimism real estate projects in the United Arab Emirates and abroad will boost earnings. Qatari shares increased.

Arabtec Holding Co. jumped 9.5 percent by the close in Dubai to a record 7.98 dirhams after the builder said it was pressing ahead with a plan to build the Gazprom tower skyscraper in St. Petersburg. Aldar Properties PJSC gained for a fourth day in Abu Dhabi after starting three residential projects in the U.A.E. capital. The DFM General Index added 2.9 percent, the most since Jan. 28, to 4,984.04, while Abu Dhabi’s gauge climbed 1 percent. The Bloomberg GCC 200 Index rose 0.5 percent.

Arabtec and Aldar’s projects are part of a wider recovery in the U.A.E. real estate industry. Dubai property prices, which more than halved at the peak of the global financial crisis, will jump by as much as 40 percent in 2014, according to forecasts of the emirate’s Land Department.

“Stocks related to property and construction will be a big winner” during the recovery, said Sebastien Henin, who oversees $90 million as head of asset management at The National Investor in Abu Dhabi. “You have economic development in the U.A.E. and they are key beneficiary of the boom.”

Arabtec, whose shares have almost tripled in value this year, rose for a fourth day as volume climbed to 1.5 times the three-month daily average. “Media speculations” that the company would withdraw from the project in Russia were “baseless,” Arabtec said in a statement.

Deyaar Rally

Dubai-based developer Emaar Properties PJSC surged as much as 5.4 percent to 10.75 dirhams before closing at 10.60 dirhams. Deyaar Development PJSC increased 6.1 percent to 1.75 dirhams after the company raised the limit on foreign ownership of its shares to 25 percent.

The benchmark ADX General Index climbed to the highest level since January 2006 in Abu Dhabi. Aldar, the largest listed developer in the emirate, jumped 4.5 percent to 4.61 dirhams. Shares of the company, which had to rely on a government bailout to help it through the financial crisis, have increased 67 percent this year.

Property companies in the U.A.E. and Qatar led gains on the BGCC200 Index of Gulf Cooperation Council shares, which advanced to the highest level since September 2008. United Development Co., a Doha-based developer, surged 6.3 percent. The company signed a 1.45 billion-riyal ($398 million) sales agreement for a property in The Pearl, a development on a manmade island.

MSCI Upgrade

Qatar’s benchmark QE Index rallied 1.5 percent to the strongest level since September 2005. Along with the U.A.E., the nation will be upgraded to emerging-market status at MSCI Inc. next month. The MSCI Emerging Markets Index is tracked by investors managing more than $8 trillion in assets.

“The trend will continue to be strong in both the U.A.E. and Qatar until the MSCI announcement as investors bet on which names will be included into the emerging-market index,” Ramez Merhi, director of asset management at Dubai-based Al Masah Capital, said in e-mailed comments.

Kuwait’s equity gauge advanced 0.7 percent and Bahrain’s measure increased 0.5 percent. The Tadawul All Share Index dropped 0.2 percent, while Oman’s measure slipped 0.1 percent. Equity markets in Egypt and Israel were closed for public holidays.

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