Investors show strong appetite as property shares spur UAE bourses

08/04/2014 07:59 AST

Property and banking stocks lifted markets in the United Arab Emirates on Monday while petrochemical and retail names weighed on Saudi Arabia’s Tadawul.

Dubai’s bourse DFM rose 1.4 per cent to 4,654 points, recovering from a minor pull-back on Sunday.

Bourse operator DFM gained 0.6 per cent on above-average volumes.

DFM also said last month its trading volumes this year had grown 425 per cent year-on-year, which was likely to translate into higher income. HSBC forecast DFM’s first-quarter profit will jump 647 per cent to Dhs202 million ($55 million).

“I think investors are starting to price in (expected) first-quarter numbers,” said Sanyalak Manibhandu, manager of research at NBAD Securities.

Dubai Islamic Bank added 2.2 per cent. The bank owns a 41 per cent stake in developer Deyaar, whose shares have soared following its decision to allow foreign ownership of the stock.

Developers Emaar Properties and Union Properties along with contractors Arabtec and Drake and Scull were among Dubai’s other notable gainers.

Property prices up 33%

Residential property prices in the emirate grew 33 per cent year-on-year in the first quarter, according to a report from property consultancy Jones Lang LaSalle on Monday. It forecast further price and rent increases across all property sectors this year.

Real estate investment trust Emirates will further test investor appetite for the sector when it starts trading on NASDAQ Dubai on Tuesday.

The trust priced its initial public offering at a price-to-earnings ratio of 5.2, slightly below Union Properties’ 5.6. Bigger names Emaar and Aldar Properties trade at 25.6 and 10.3 respectively, according to Thomson Reuters data.

Abu Dhabi’s bourse scaled the psychologically-important level of 5,000 points, rising 0.9 per cent to 5,012.

Aldar rose 4 per cent to a fresh four-year high, up for a second day after unveiling tentative plans to float its property management unit Khidmah.

National Corporation for Tourism and Hotels jumped its daily limit of 15 per cent ahead of the April 9 shareholder registration deadline for its 50-per cent cash dividend payout.

Doha’s bourse rose 1 per cent to 12,217 points, its highest finish since June 2008, as blue-chip stocks led gains.

Qatar’s adoption of a record $60 billion state budget late last month sparked the latest rally. The benchmark is now up 18 per cent in 2014 and is the second-best performing Gulf index behind Dubai, which has gained 38 per cent.

Saudi Arabia’s bourse slipped 0.3 per cent to 9,508 points. Heavyweight petrochemicals producer SABIC 2010.SE fell 0.6 per cent as global oil prices eased on expectations of increased Libyan supplies. Other petrochemicals also dipped.

Reuters