Second session of gains has Dubai stock market back with bulls

The jump comes after a rebound in Brent oil prices and a relief rally in US stocks on Friday.

Dubai stocks rallied on the back of Emaar, with the index closing 9.9 per cent on Sunday. Reem Mohammed / The National

Dubai’s main equity index rallied on the back of Emaar Properties as stocks pulled themselves back into a bull market.

The jump, fund managers said, comes after a rebound in Brent oil prices and a relief rally in US stocks on Friday after the US Federal Reserve refrained from raising interest rates. The DFM General Index jumped 9.9 per cent, while the Abu Dhabi Securities Exchange General Index increased 3.5 per cent. Emaar advanced 13.7 per cent to Dh7.71 while Emirates NBD rose 12.1 per cent to Dh8.24.

In Abu Dhabi, the developer Aldar Properties rallied 13 per cent to Dh2.6 while Abu Dhabi Commercial Bank advanced 8.7 per cent to Dh7.5.

A bull market is generally accepted to be when a security or index jumps 20 per cent from a low and a bear market is the opposite.

Still, portfolio managers said the road ahead will still probably be rocky as the bottom for oil and the impact that will have on the UAE’s crude dependent economy are not yet clear.

“I would expect volatility to continue,” said Sachin Mohindra, a portfolio manager at Abu Dhabi-based Invest AD. “I am still cautious because nothing has really changed in the last one week or so. Most analysts weren’t expecting a the US Federal Reserve to increase interest rates. Second, I don’t think the oil price volatility has gone away. The fundamentals have not changed. The Opec producers are maintaining that they will not cut oil production.”

The strong wave of buying has been accompanied by an increased number of shares changing hands.

The value of shares traded on the DFM was Dh2.01 billion compared with the 50-day average of Dh1.05bn, while on the ADX, it was Dh762.1 million compared with the 50-day average of Dh329.1m.

Dubai’s measure rallied 13 per cent on Thursday, its biggest jump to date, while the ADX surged by 6.7 per cent.

The DFM had shed 14 per cent in the week before Thursday's rebound, and more than Dh60bn was wiped off the market value in the same period. That drop came as Brent crude extended losses to levels not reached since 2009 as the price declined below $60 a barrel. On Friday, Brent gained 3.6 per cent to $61.38.

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