Dubai Stock Market Registers Biggest Two-day Gain
14 December 2009
DUBAI — The Dubai stock market continued to rally on Sunday, building on a 7 per cent surge it made before the weekend on Thursday, to post the biggest two-day gain in more than a year.
Abu Dhabi’s index also gained the most since March on hopes that Dubai World would make a last-minute move to avoid a default on its property unit Nakheel.
Investors see the $3.5 billion Nakheel bond maturing today, but with a two-week grace period ending on December 28, as a key test for Dubai’s ability to meet its financial obligations.
The DFM General Index, which nose-dived 19 per cent since Dubai World’s debt standstill announcement on November 25, rose 3.3 per cent to 1,695.35, bringing its two-day gain to 11 per cent, the most since October 2008. Abu Dhabi’s index added 4.5 per cent, the biggest one-day jump since March 24.
Property developer Emaar Properties jumped 6.8 per cent, while National Bank of Abu Dhabi, the UAE’s second biggest lender by assets, rose the most in 10 months.
Emaar shares, which triggered the market rally on Thursday with a 14.84 per cent surge in the wake of a decision to abandon a merger with three real-estate units of Dubai Holding LLC, were trading more than 8.0 per cent up on Sunday. Emaar rose to Dh3.14, the highest close in almost a week. The stock has soared 23 per cent since it said on December 9 it abandoned the merger move.
“Now with the overhang cleared, we believe investors should direct their focus back to Emaar’s fundamental value as a standalone entity,” EFG-Hermes investment bank said in a report on Sunday.
Nasdaq Dubai-listed DP World, majority owned by Dubai World, last traded 8.6 per cent higher at $0.38.
National Bank of Abu Dhabi rose 9.7 per cent to Dh11.85 and Aldar Properties added 8.7 per cent to Dh4.53.
Construction major Arabtec’s shares also went up by 7 per cent, while the stocks of budget airline Air Arabia were up just over one per cent.
Dubai Islamic Bank shares appeared to shrug off a rate downgrading by Moody’s as they surged by nearly 10 percent. Emirates NBD bank, also downgraded, seemed to react negatively, dropping by over four per cent.
“The market has come to a critical level and many investors believe the recent selloff was not justified,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “We already know that there were meetings with the banks and there is a buzz that there might be agreements with the bondholders, so the market is remaining really hopeful.”
If there’s no news about the Nakheel bond tomorrow the markets could see another selloff, but not with the same momentum of the past few weeks, he said.
Issac John (With inputs from agencies)
DUBAI — The Dubai stock market continued to rally on Sunday, building on a 7 per cent surge it made before the weekend on Thursday, to post the biggest two-day gain in more than a year.
Abu Dhabi’s index also gained the most since March on hopes that Dubai World would make a last-minute move to avoid a default on its property unit Nakheel.
Investors see the $3.5 billion Nakheel bond maturing today, but with a two-week grace period ending on December 28, as a key test for Dubai’s ability to meet its financial obligations.
The DFM General Index, which nose-dived 19 per cent since Dubai World’s debt standstill announcement on November 25, rose 3.3 per cent to 1,695.35, bringing its two-day gain to 11 per cent, the most since October 2008. Abu Dhabi’s index added 4.5 per cent, the biggest one-day jump since March 24.
Property developer Emaar Properties jumped 6.8 per cent, while National Bank of Abu Dhabi, the UAE’s second biggest lender by assets, rose the most in 10 months.
Emaar shares, which triggered the market rally on Thursday with a 14.84 per cent surge in the wake of a decision to abandon a merger with three real-estate units of Dubai Holding LLC, were trading more than 8.0 per cent up on Sunday. Emaar rose to Dh3.14, the highest close in almost a week. The stock has soared 23 per cent since it said on December 9 it abandoned the merger move.
“Now with the overhang cleared, we believe investors should direct their focus back to Emaar’s fundamental value as a standalone entity,” EFG-Hermes investment bank said in a report on Sunday.
Nasdaq Dubai-listed DP World, majority owned by Dubai World, last traded 8.6 per cent higher at $0.38.
National Bank of Abu Dhabi rose 9.7 per cent to Dh11.85 and Aldar Properties added 8.7 per cent to Dh4.53.
Construction major Arabtec’s shares also went up by 7 per cent, while the stocks of budget airline Air Arabia were up just over one per cent.
Dubai Islamic Bank shares appeared to shrug off a rate downgrading by Moody’s as they surged by nearly 10 percent. Emirates NBD bank, also downgraded, seemed to react negatively, dropping by over four per cent.
“The market has come to a critical level and many investors believe the recent selloff was not justified,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “We already know that there were meetings with the banks and there is a buzz that there might be agreements with the bondholders, so the market is remaining really hopeful.”
If there’s no news about the Nakheel bond tomorrow the markets could see another selloff, but not with the same momentum of the past few weeks, he said.
Issac John (With inputs from agencies)
issacjohn@khaleejtimes.com
Quoted from: Khaleejtimes.com
