Dubai shares gained the most in 18 months, rebounding from the worst weekly slump since 2011, after the U.S. president put off a military strike against Syria. The Dubai Financial Market General Index advanced 3 percent, the biggest jump since March 2012, to 2,599.35 at the close in Dubai.
The measure slid 6.6 percent last week amid concern a military strike against Syria was imminent and would hurt tourism and investments in the emirate. Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai, gained the most in almost four weeks and Deyaar Development PJSC, a builder of home and office towers, surged 13 percent, before announcing a joint venture for a residential tower.
U.S. President Barack Obama said Saturday he would seek authorization from Congress before ordering the strike against Syria for using chemical weapons, delaying action to at least Sept. 9.
Last week’s decline “was sharper, so in context a rebound of this magnitude is not surprising,” Amer Khan, a director at Shuaa Asset Management, said in an email. The political situation in Syria “has lost the urgency it had prior to the weekend, given the developments in the U.K. and the U.S.”
While Obama said he had already decided to take military action, he will give lawmakers the opportunity to debate and vote on it. France, which had indicated it would join in taking military action, said it would wait for its parliament before taking action, according to the Associated Press.
The “sharp rebound in the UAE indices was driven once again by domestic retail investors responding to the dissipating threat of Syrian strikes,” Julian Bruce, head of institutional trading at EFG-Hermes UAE Ltd., said by email Sunday.
Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Shariah-compliant bank, climbed 3.3 percent, the most since Aug. 6, to 3.45 dirhams. Emaar rose 1.7 percent to 5.85 dirhams and Deyaar surged to 54 fils. There are 100 fils to the dirham.
Abu Dhabi’s benchmark index gained 1.8 percent, Saudi Arabia’s 1.5 percent, Oman’s measure 0.7 percent and Qatar’s 0.5 percent. Kuwait’s fell 0.1 percent and Bahrain’s was little changed. Egypt’s EGX 30 Index increased 0.6 percent. The yield on the benchmark 4.25 percent notes due March 2023 declined four basis points, or 0.04 percentage point, to 3.97 percent.
Last week, Dubai’s index had the biggest weekly slump since March 2011, leaving the gauge at an average price-to-book ratio of 1 compared with 2 in neighboring Saudi Arabia and 1.7 in Qatar.