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Gulf bourses rose yesterday as investors triggered a fresh buying spree at the start of the third quarter, and expectations of a strong earnings season in coming weeks boosted stocks in the United Arab Emirates.
Dubai’s index climbed 2.5% to a one-week high, extending 2013 gains to 40.4%. Trading volumes improved compared to recent sessions, but remained unimpressive.
“UAE markets started the quarter in a positive note — investors are betting on strong and solid Q2 numbers, they don’t want to miss the bottom after the major drop we have witnessed last week,” said Mohab Maher, senior manager of the institutional desk at Mena Corp brokerage.
Dubai’s measure has been in a correction phase since it hit a 55-month high in early June.
Bluechips led gains with Emaar Properties rising 3.8%.
Abu Dhabi’s index added 1.7% to hit an 11-day high. Aldar Properties surged 6.4%, extending gains since its merger with Sorouh Real Estate.
HSBC raised the stock’s price target to Dh2.6 with a ‘neutral’ rating in June and said recurring-revenue generating assets, contracting business and a large land bank would drive the value of the combined entity.
“Volumes are picking up again. Investors will start to accumulate the market from here, especially on real estate and banking sectors,” Mena Corp’s Maher added.
In Saudi Arabia, the benchmark rose 1% to a near three-week high and closed less than 100 points away from matching an 11-month peak of early June.
Banks and petrochemical shares led gains with banking sector index adding 1.5% and the latter gaining 1.1%.
Many of the banking shares were deemed undervalued as they lagged a rally in other sectors such as retail, and increasing lending growth is expected to result in strong quarterly earnings, analysts said. Shares in Saudi Steel Pipes rose 4.6% to 27.10 riyals ($7.23) after NCB Capital raised its price target to 29 riyals.
Oman’s measure advanced 1.5% to its highest level since June 16 after an annual adjustment to the constituents of the main index took effect.
Hassan Engineering, one of the five additions to the 30-stock benchmark index, gained 1.9%. Oman United Insurance, another addition, rose 2.1%.
“The rise is mainly because of the new entries into the general index in addition to the fresh positions that asset managers open at the start of the second half of the year,” said Adel Nasr, United Securities brokerage manager.
The Oman exchange has also launched a sharia index as part of the country’s development of Islamic finance; the index started operating yesterday.
Elsewhere in the Gulf, Qatar’s benchmark climbed 0.6% and Kuwait’s measure added 1.4%. The Bahrain index slipped 0.3% to 1,185 points. Egypt’s market was closed yesterday for a public holiday.
