Dubai Shares Rise Most in 3 Weeks on Valuations; Tadawul ClimbsSarmad Khan and Ahmed A. Namatalla
Dubai shares added the most in more than three weeks as some investors judged stocks were cheap after a selloff wiped more than $60 billion from Middle Eastern equity markets yesterday. Saudi Arabia’s equities increased.
The Dubai Financial Market General Index increased 1.9 percent to 4,708.70 at the close, after plunging 6.5 percent yesterday. Abu Dhabi’s ADX General Index advanced 1 percent, and Qatar’s QE Index added 0.5 percent. Saudi Arabia’s Tadawul All Share Index, the main measure for the Arab world’s biggest equities market, rebounded from the sharpest slump in more than three years, rising 2.3 percent, the most since July 22.
Middle Eastern stocks are recovering amid speculation yesterday’s losses were overdone. Dubai’s 14-day relative strength index, a measure of the velocity of gains and losses, fell under 30 for the first time since June, indicating to some investors the measure was oversold. It closed today at 36.3.
“From a lot of institutional investors’ perspectives, we are at very favorable levels, given the drop yesterday,” Nayal Khan, head of institutional sales and trading at Naeem Holding brokerage in Dubai, said by telephone. Yesterday’s selloff had “more to do with oil prices, but people now realize that our budget break-even prices don’t get affected significantly” at current levels, he said.
Brent oil fell to $88.43 a barrel, the lowest since November 2010 on a closing basis.
In Egypt, the benchmark EGX 30 Index extended losses into a sixth day, the longest losing streak in almost a year. The measure retreated 0.5 percent, taking its drop to 7.1 percent since reaching a six-year high at the end of September. Israel’s TA-25 Index added 0.7 percent.