Bank and property stocks lead way

UAE stocks soar as the property sector looks brighter and traders position themselves ahead of earnings releases by banks.

Drake & Scull was in demand yesterday.

The UAE's bank and property stocks rose yesterday to lead both indexes higher, as traders positioned themselves for a rush of earnings results.

The Dubai Financial Market General Index rose 1.6 per cent to 1,680.96 points, while the Abu Dhabi Securities Exchange General Index gained 0.19 per cent to 2,708.75.

Majed Azzam, a property analyst at Alembic HC Securities, said optimism was returning over prospects for the sector.

"We're seeing a turnaround in earnings this year as they deliver a lot of properties," Mr Azzam said. "Real estate names have lagged other sectors and they're playing catch-up right now. We're seeing a lot of liquidity moving from Egypt into the UAE."

Drake & Scull International, one of the most traded stocks in yesterday's session, increased 1.85 per cent to Dh1.10 a share. Emaar Properties, the developer of the Burj Khalifa, rose 1.47 per cent to Dh3.46 a share.

The banking sector also saw big gains, even as the country's biggest bank by market capitalisation declined. National Bank of Abu Dhabi (NBAD) lost 0.88 per cent to Dh11.30 a share, after the bank reported first-quarter profits of Dh923 million on Tuesday, a 10 per cent decrease on the year before.

Despite NBAD's results, investors said the details had given fresh impetus to stocks elsewhere in the sector.

"Loan growth is present and that's followed with deposit growth," said Yong Wei Lee, a senior fund manager at Emirates NBD. "Deposit growth confirms that liquidity is returning."

Mr Lee added the market had expected NBAD's peers to show lower provisioning when they report earnings this month.

First Gulf Bank, the third-largest lender in the capital, rose 2.27 per cent to Dh18 a share. The bank is expected to report first-quarter earnings today.

Most other Gulf markets increased, although only Kuwait came close to Dubai's gains for the day. Qatar and Oman fell slightly.