Dubai Shares Lead Gulf Equity Market Rally After Oil Prices Jump

01/02/2015 11:34 AST

Dubai stocks advanced the most in three weeks, leading equity markets across the Arab world higher, after oil rallied on signs a price slump will curb output.

The DFM General Index added 2.8 percent, the most since Jan. 11, to to 3,778.66 at 11:52 a.m. local time. Abu Dhabi’s ADX General Index climbed 1.3 percent, its first increase in five days, and Qatar’s QE Index rose 1.2 percent, headed for the strongest close since Jan. 8. Gauges in Kuwait and Oman also gained.

Brent crude, the benchmark for more than half the world’s oil, surged the most in almost six years on Jan. 30 after Baker Hughes Inc. reported that the U.S. rig count fell to a three-year low. The Organization of Petroleum Exporting Countries, of which four out of six Gulf Cooperation Council states are members, has maintained output amid the lowest prices since 2009, challenging the growth in U.S. production.

“Oil price volatility is still the main driver in the regional markets,” Wadah Al Taha, chief investment officer of Dubai-based Al Zarooni Group, said by phone today. “It’s a combination of a substantial jump in crude prices last week and some good numbers we’re seeing by United Arab Emirates companies.”

Crude, which fell into a bear market last year, surged 7.9 percent to $52.99 a barrel on Jan. 30. It had the best weekly performance since February 2011, according to data compiled by Bloomberg.

Dubai Investments PJSC soared 9.6 percent, the biggest increase in six weeks, after reporting a more than 60 percent jump in profit in 2014. The investment company’s board proposed a 12-percent cash dividend and 6 percent bonus shares.

Emaar Properties PJSC, developer of the Burj Khalifa, the world’s tallest tower in Dubai, led the benchmark gauge’s advance with a 4.9 percent jump.

Bloomberg