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Dubai financial market index reaches 57-month high | ASHARQ AL-AWSAT English Archive 2005 -2017
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An investor looks up at screens displaying stock information at the Dubai Financial Market, June 17, 2013 (REUTERS/Jumana El Heloueh)

An investor looks up at screens displaying stock information at the Dubai Financial Market on June 17, 2013 (REUTERS/Jumana El Heloueh)

An investor looks up at screens displaying stock information at the Dubai Financial Market, June 17, 2013 (REUTERS/Jumana El Heloueh)

Dubai, Asharq Al-Awsat—Dubai’s financial market index reached its highest levels in 57 months on Sunday, amid optimism regarding the second quarter’s results, which stimulated trading activity.

Real estate topped the list of the most profitable sectors.

The shares of Arabtec Construction LLC have risen by 4.2 percent, taking its gains since the beginning of the year to 21 percent. Five analysts polled by Reuters predicted the company’s profits to reach AED 51.4 million (USD 13.9 million) in the second quarter, compared with a loss in the same period of last year.

The subscription in the rights issue of the company, worth USD 650 million, exceeded supply by about 30 percent earlier this month after the extension of the subscription period. The shares of Emaar Properties and Dubai Investments rose by 1.9 percent and 7.1 percent respectively. Dubai Financial Market index rose by 2 percent to its highest level since November 2008. Trading volumes increased to their highest level in a month.

Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services, said: “There will be interest in buying stocks that make profits immediately after the announcement of the figures.”

The Abu Dhabi market general index has risen by 0.9 percent to reach its highest level in 57 months. UAE companies are expected to announce the financial results for the second quarter later this month.

Foreign investors, meanwhile, have started to support the Egyptian market again. In Cairo, the main index of the Egyptian Stock Exchange rose by 0.6 percent, driven by a rise in investors’ confidence following plans by the interim government for transition to civilian rule. The market had declined in three of its five sessions since reaching its highest levels in a month, following the removal of former president Mohamed Mursi.

Omar Reda, from Pharos Securities, said that the road map has become clearer on both the political and economic fronts, and that things looked more promising after Gulf states pledged financial aid to Egypt. The United Arab Emirates, Saudi Arabia and Kuwait have pledged aid worth USD 12 billion, to help Egypt cope with shortages of fuel, grain and foreign exchange reserves in the short term.

However, some analysts say that there are still some concerns, and that the market will face more pressures if the unrest worsens or if there is a delay in forming a government.

A senior figure in the Muslim Brotherhood called for mass demonstrations in Egypt on Monday to demand the return of deposed president Mohammed Mursi.

Stock exchange data indicated that foreign purchases exceeded sales in a change of direction in the market since the downturn in June, when it fell due to the escalating political tensions that ended in the ouster of Mursi.

In Saudi Arabia, the index rose 0.7 percent, to its highest level since April 2012. Stocks of petrochemical companies boosted the index, with a rise in the shares of Saudi Basic Industries Corporation (SABIC) of 1.3 percent. The median forecast of ten analysts polled by Reuters indicated a growth of 20 percent in the company’s quarterly profits. The international emerging markets also contributed to a rise in investors’ confidence in the kingdom, whose currency, the Saudi riyal, is linked to the US dollar.