DUBAI: Dubai’s bourse hit its highest level in five months, while Abu Dhabi’s index ended at a fresh 14-month high as confidence in the reviving local property market boosted real estate stocks. The Dubai index jumped 1.2 percent to its highest close since May 1.
Property stocks recovered from Tuesday’s dip with Emaar Properties up 2.5 percent, Union Properties climbing 1.8 percent and Tamweel gaining 1.6 percent.
Four years after Dubai’s real estate bubble burst in 2008, sending prices down 60 percent, areas of the emirate’s property market have shown signs of recovery in recent months.
This optimism was reinforced at a large property show in Dubai this week as developers unveiled billion-dollar projects and new high-end residential developments.
“If you get names like Emaar, Arabtec, Deyaar and Drake and Scull moving then this creates a positive impact on the wider bourse,” said Julian Bruce, EFG Hermes’ director of institutional equity sales.
Bruce added the market was also boosted by the news that Vanguard Group, one of the largest mutual fund providers in the U.S., would switch to using FTSE Group from MSCI for benchmarking, opening up stocks in the UAE and Egypt to their funds.
While FTSE classifies both as emerging markets, MSCI ranks them as frontier markets.
“The timing remains uncertain but this type of event is always a catalyst for increased speculative activity,” he said.
Abu Dhabi’s measure gained 0.2 percent, advancing from the previous day’s highest close since Aug. 4 2011.
The two property firms whose proposed merger has driven positive sentiment on the bourse in recent days, Aldar Properties and Sorouh Real Estate, rose 1.5 and 0.8 percent respectively.
Saudi Arabia’s bourse, which had gained for three sessions since Saturday’s two-month low, slipped back Wednesday, ending the final trading day of the week down 0.1 percent.
Volumes slumped once more with around 145 million shares traded on the benchmark.
Arab National Bank fell 1.1 percent to its lowest close since July 2, its 12th decline in the last 14 sessions.
Saudi Telecom Co dipped 0.3 percent to 40.20 riyals. HSBC has raised its target price on STC to 48 riyals from 44 riyals, according to a note from the bank.