The UAE’s stocks rose yesterday amid strong third-quarter results and increased monetary stimulus from the Bank of Japan.
It was the Abu Dhabi market’s best day in more than three months and Dubai’s best in a week.
“Towards the end of last week the UAE got a bit of a thumping – so the rebound was expected for today,” said Sanyalaksna Manibhandu, a senior equities analyst at the National Bank of Abu Dhabi.
“Banking results in the last week have been better than expected … and the macroeconomic backdrop from around the world has been positive.”
The Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) both closed up yesterday, with the ADX General Index gaining 1.3 per cent to 4,927.43 points and the DFM General Index gaining 1.5 per cent to 4,616.12.
The surge added Dh10.81 billion to the total value of stocks on both markets.
Dubai’s Emaar Properties closed up 4 per cent at Dh10.40 a share yesterday in its biggest one-day rise since September, after signalling on Thursday that it would pay its special Dh9bn cash dividend before the end of the year.
Emaar recorded higher profits in third-quarter earnings released last week, but missed analyst estimates as revenues fell.
“We … continue to highlight [Emaar Properties] as our preferred Middle East and North Africa real estate pick,” wrote Muneeza Hasan, an equities analyst at JP Morgan. “Emaar’s recurring income still has further room to grow,” she said, citing retail and hotel segments as areas where revenues were likely to increase.
Citing the decline in Emaar’s share price on Thursday, Mr Manibhandu said: “Maybe there was an overreaction [to the third-quarter results].”
New monetary measures announced by the Bank of Japan and the growing sensitivity of the UAE to international market forces explained the UAE market’s strong day yesterday, Mr Manibhandu said.
The Bank of Japan announced a significant increase in its purchases of stocks and bonds on Friday, while the country’s pension fund also announced that it would increase its stock purchases. This sent global markets upwards, with the S&P 500 reaching an all-time high.
Abu Dhabi Ship Building and Ras Al Khaimah Cement were the biggest gainers on the ADX, both rising by about 5 per cent to Dh2.44 and Dh1.07, respectively. Ajman Bank was the strongest performer on the DFM, climbing 10.9 per cent to Dh2.54.
abouyamourn@thenational.ae
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