Dubai Financial Market surged as Dubai’s high beta names led gains on the emirate’s index DFM, which reached a 16-week closing high on the first day’s trading after Ramadan.
DFM climbed 6 percent. Market volumes have spiked over the past week, with Monday’s the highest index total for 11 weeks, boosting DFM’s stock because the company derives most of its income from trading commissions.
Emaar Properties rose 2.7 percent and Arabtec added 3.3 percent. This pair, together with DFM, accounted for nearly two-thirds of shares changing hands on the index, which climbed 2.4 percent to 1,631 points, its sixth straight gain and highest finish since May 24.
The index was down 9.6 percent in 2010, making it the worst performing Gulf Arab benchmark as Dubai’s debt mountain, continued declines in property prices and lacklustre bank lending weighed on stocks.
“A lot of people in the UAE are playing a short-term post Ramadan trade – for us we are playing wait-and-see,” said Robert McKinnon, ASAS Capital chief investment officer.
Gulf Arab markets often rallied in the latter part of the year as local investors return from overseas summer vacations and so speculators are trying to pre-empt any sustained rally, traders said.
Abu Dhabi’s index ADI climbed 1.4 percent to 2,567 points.
Aldar Properties added 1.7 percent and RAK Properties rose 5.1 percent.