Dubai stocks rebound as Fed rate view lifts global markets

10/10/2014 09:36 AST

Bourses in Dubai and Bahrain rebounded yesterday in line with global markets, but Abu Dhabi and Egypt continued to slide, although at a slower pace, as many investors appeared to be taking extended breaks for the Eid al-Adha holiday.

Markets across the region had dropped on Wednesday as global equities came under pressure from worries about economic growth. But indications that the US Federal Reserve may be cautious about hiking interest rates triggered an overnight turnaround on major international markets.

Also, the price of Brent crude oil rose off Wednesday’s two-year low as the US dollar weakened. While oil prices are not expected to have much direct impact on the UAE economy, as the government has ample reserves to maintain high state spending, they may affect investor sentiment.

“We are following global markets, nothing more, nothing less,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi, referring to Dubai stocks.

Dubai’s index added 0.9%. Emaar Properties, up 1.8%, was the main support, while builder Arabtec jumped 4.7%.

Arabtec shares have jumped and then retreated repeatedly over the last few months on rumours that Abu Dhabi state fund Aabar Investments, a major shareholder, would buy the stake owned by Hasan Ismaik, who abruptly resigned from his position as Arabtec chief executive in June.

Although Ismaik has confirmed he was in talks to sell the stake, no deal has been announced yet.

Bahrain’s bourse edged up 0.2% and Abu Dhabi’s benchmark slipped 0.1% after gaining 0.3% earlier in the session.

Egypt’s main index edged down 0.4%, largely because of Commercial International Bank, which fell 0.7%.

Volumes remained low on all four exchanges as many retail investors have yet to return to the markets after the Eid holiday, and bourses in Saudi Arabia, Kuwait, Qatar and Oman remained closed.

Gulf Times