DFM bursts back through 4,000 after three-week stock rally

Dubai’s main stock index broke through the 4,000 mark on Thursday for the first time since December, with a positive outlook from Emaar Properties capping a three-week market rally.

Shares in Emaar Properties surged 9.4 per cent to Dh8.15 each, their highest level since December, after the developer said on Wednesday that its profit this year would grow to Dh3.69 billion, ahead of analyst predictions.

Investors were also cheered by the reappointment of the developer’s charismatic chairman, Mohamed Alabbar, ending months of speculation that he would step back from his responsibilities at the company.

Emaar’s shares acted as a catalyst for the wider DFM General Index, which ended up 3.51 per cent at 4,079.91, the first time the index closed above the psychologically important 4,000 mark since December 7.

The rise in Emaar shares had a predictable knock-on effect on other real estate stocks. Damac Properties shares led gains in Dubai for the day, ending up 11.54 per cent at Dh2.90, their highest level of the year.

Other blue-chip stocks including Emirates NBD, Emaar Malls and Aramex also hit fresh highs for the year.

Emaar’s news capped a three-week rally on the DFM, as retail investors return to the market after pulling back in February and March.

The index has gained nearly 20 per cent over the past three weeks, with traders discussing 4,200 as a new resistance level.

“There is a combination of several factors at work in the markets right now,” said Tariq Qaqish, the head of asset management at Al Mal Capital.

“What’s been happening with Brent crude prices has been important. There has been progress in Iran talks, and so far first quarter earnings have been solid, so investor confidence has improved a lot.”

Earlier this week, Dubai Islamic Bank, the emirate’s largest Islamic lender, posted a 34 per cent rise in net profit, ahead of analysts’ expectations.

Brent crude, meanwhile, hit new highs for the year on Thursday, rising to about $63 per barrel in early trading amid evidence that US oil production may be approaching peak levels, easing fears of an oversupply in the global market.

Stocks have further room for growth, said Mr Qaqish, particularly if negotiations with Iran lead to a lifting of international sanctions on the country.

“There are a number of good factors at play in the country right now. Trade and tourism is solid, and non-oil is growing steadily,” he said.

“Fundamentally, if sanctions are lifted, the UAE will benefit enormously, as it could trigger a better story for trade, tourism and a number of different sectors.”

The Abu Dhabi Securities Exchange General Index ended the day up 0.72 per cent at 4,655.80, its highest close for the past six weeks.

Dana Gas was the among the biggest gainers on the index, rising 4.35 per cent to 48 fils.

Saudi Arabia’s Tadawul All Shares Index closed 0.95 per cent higher at 9,251.19.

The Arabian Gulf region’s bourses all ended the day in the black.


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