Bank dividend lifts Abu Dhabi market

30/01/2012 08:37 AST

Abu Dhabi's stock market rose yesterday on increased investor optimism.

The upturn came after Abu Dhabi Commercial Bank on Thursday announced a 20 per cent cash dividend as fourth-quarter profits increased 38.5 per cent.

The country's third-largest lender added 0.3 per cent to Dh2.98. First Gulf Bank jumped 1.9 per cent to Dh15.60. Abu Dhabi Islamic Bank added 1.2 per cent to Dh3.13. The Abu Dhabi Securities Exchange General Index rose 1.7 per cent to 2,432.61 points.

"Abu Dhabi Commercial Bank's cash dividend, its first payment since 2008, has given a strong positive signal to the market, that the bank is comfortable with its liquidity and capital base," said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai. "The euphoria has spilled over to the broader banking sector."

Dubai shares declined as retail investors sold blue-chip companies after a strong rally last week. Emaar Properties, the region's largest developer, lost 1.4 per cent to Dh2.66. Tamweel lost 1 per cent to 64 fils a share. After the trading session, the Islamic mortgage finance company reported a quarterly profit of Dh31 million last year, compared with Dh8m the year earlier. The Dubai Financial Market General Index lost 0.3 per cent to 1,401.45.

"Investors were booking short-term profit at primary resistance levels. It was more of a technical play rather than fundamental or news-related movements," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai. "We suspect a strong rebound in Dubai on Tamweel's announcement tomorrow."

The National