Dubai shares skyrocket despite oil price decline

Published December 29th, 2014 - 09:59 GMT

Dubai stocks led a Gulf-wide market rally on Sunday by jumping to the highest level in more than two weeks despite a new decline in the price of oil.

The benchmark DFM General Index rose 2.58 percent to close at 3,987.14 points, the highest since December 8 to sustain the bull market trend. Qatar’s QE Index gained 1.5 percent and Abu Dhabi’s ADX General Index surged 1.3 percent.

The main Saudi Arabian Tadawul All Share Index advanced 0.7 percent, taking its gain since reaching an 18-month low on December 16 to 21 percent as most sectors gained.

The DFM benchmark measure rose briefly above the 4,000-point mark but then gave up some of its gains as developer Emaar Properties advanced 3.92 per cent to close at Dh7.95. Arabtec surged 2.51 percent to Dh3.27. Union Properties jumped 4.72 per cent to Dh1.33, while another real estate major Deyaar climbed 3.19 percent to 0.97.

Dubai Islamic Bank rose 3.74 percent to Dh7.21 and the DFM shares surged 3.35 percent to Dh2.16. Shares in retail start-up Marka surged 5.6 percent after it said it had agreed to buy sporting goods retail firm Retailcorp from Dubai World for over Dh220 million in move that will make Marka, which listed this year, operationally profitable in 2015, it said.

The DFM index trades at 12.5 times projected 12-month earnings, up from 9.7 on December 17, and compared with 11.1 for the MSCI Emerging Markets Index.

Dubai’s equity benchmark was the best-performing gauge this year through August among the 90 indexes tracked by Bloomberg. It was down 10 percent year-to-date on December 17 and up 18 per cent on Sunday.

The DFM measure entered a bull market on December 21 and surged a further 13 percent surge in the last five trading days as confidence returned following a collapse in crude prices.

On the ADX, the real estate sector drove the rally with jump of 2.55 percent as banking and financial sectors both jumped 1.41 percent each. Blue chips such as National Bank of Abu Dhabi and First Gulf Bank climbed 1.5 and 1.2 per cent respectively.

Takween Advanced Industries rose 2.1 percent after saying it was in final talks with food maker Savola Group on buying Savola’s packaging unit. Shares in Savola fell 0.7 percent.

In Saudi Arabia, the benchmark rose a seventh time in eight days to enter a bull market at the close. The main gauge for the biggest Arab bourse, entered a bear market on November 30.

Kuwait’s index added 1.5 percent while Oman’s was little changed. Bahrain’s main gauge rose 0.1 per cent and Egypt’s EGX 30 Index advanced 0.4 percent. Qatar’s bourse rose 1.6 percent.

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