UAE's markets avoid sell-off seen in global bourses

Market Wrap: The UAE's stock markets prove resilient, struggling against the tide of a sharp sell-off in equities worldwide.

A "perfect storm" of Greek debt worries and US inflation prompted a sell-off on global stock markets today, but the UAE remained resilient as traders bet on the positive impact of Dubai's bond and the prospect of an MSCI upgrade.

Amid a sharp sell-off in global equities, Abu Dhabi's stock market was among the best performing in the world. The increase of 0.65 per cent to 2,761.48 was outperformed only by Slovakia and Vietnam.

Dubai's stocks were flat at 1,600.98, following a day when the emirate's bourse also outperformed world equity markets.

The boost to local stocks came following the successful launch of Dubai's $500m bond, which was almost four times oversubscribed, receiving an order book of $1.8bn according to Bloomberg.

Dubai stocks including Emirates NBD and Arabtec declined, balanced by rises at Emaar Properties and Dubai Financial Market.

Abu Dhabi's index, which is less internationally exposed than Dubai, was buoyed by large cap companies such as Abu Dhabi Commercial Bank, Aldar and Etisalat.

Blue-chip stocks were being bought heavily on continued speculation that the UAE will receive an upgrade to emerging markets status by index provider MSCI, said Talal Touqan, head of research at AlRamz Securities.

Despite a sell-off among traders elsewhere in the world, the underlying fundamentals of the UAE's economy and market liquidity were steadily improving, said Yazan Abdeen, a fund manager at ING Investment Management.

"There's selling forces coming from international flows. The inflation numbers from the US weren't encouraging," he said.

However, negative sentiment among traders "could be easily reversed," he added.

Despite a global sell-off yesterday, Dubai's markets were the best performing in the world, with the DFM rising 2.1 per cent and Nasdaq Dubai up 2.3 per cent. Almost every other global index plummeted.

Across the Gulf all other markets declined today, though Saudi Arabia was closed for the weekend.