The UAE’s bourses rose yesterday, despite a further fall in oil to US$45 per barrel.
The Abu Dhabi Securities Exchange rose 1.4 per cent, while the Dubai Financial Market gained 1.7 per cent.
“Some people have said that this is a decoupling of UAE equities from the oil price,” said Sanyalaksna Manibhandu, the chief equities analyst at National Bank of Abu Dhabi. “In Saudi Arabia stocks aren’t going down to the same extent as oil, either.”
The Saudi Tadawul Index gained 0.7 per cent yesterday.
Emaar Properties led gains on the DFM, rising 4.2 per cent. Arabtec rose 3.7 per cent, and Shuaa Capital gained 3.3 per cent. Sixteen stocks rose yesterday, against six decliners.
The same number of stocks on the ADX advanced, led by Arkan Building Materials, which gained 10.8 per cent. Seven stocks fell, and 38 remained unchanged. The index is down 0.4 per cent since the beginning of the year.
Lower oil prices and looming US and UAE interest rate rises may be good for banks, said Mr Manibhandu.
Bank stocks rose yesterday, with NBAD and Abu Dhabi Commercial Bank gaining more than 4 per cent on the ADX, and Ajman Bank, Dubai Islamic Bank and Shuaa Capital rising on the DFM.
Mr Manibhandu said that any fall in loan issuance resulting from low oil prices would likely be compensated by companies trying to lock in debt before interest rates rise later this year.
The entrance of investors looking for dividends, or taking positions ahead of fourth quarter results, could also explain yesterday’s rally, he said.
The Qatari Exchange and the Kuwait Securities Exchange both closed up 0.2 per cent yesterday. Bourses in Beirut, Muscat, Tunis and Manama fell.
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