DUBAI (AFP) – The Dubai stock market strengthened on Sunday, building on a 7.0 surge it made before its weekend on Thursday, lifted by property giant Emaar's decision to abandon a merger with state-owned entities.
By midday, the Dubai Financial Market index was trading 3.76 percent up at 1,702.45 points, after it had opened 0.9 percent up.
|Emiratis follow stock market activity at the stock exchange in Dubai (AFP file)|
The value of trades also increased by midday from 16.3 million dirhams (4.4 million dollars) to 814.7 million dirhams (222 million dollars).
Emaar Properties, the largest Middle East real estate firm by market capitalisation, saw its shares rocket on Thursday by 14.84 percent, narrowly missing the maximum-allowed daily increase of 15 percent.
On Sunday, Emaar shares were trading more than 8.0 percent up.
"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, referring to Emaar's decision last week to cancel a merger with the property arm of government-owned Dubai Holding.
"Given the positive nature of this announcement coupled with Emaar?s prominence on the DFM, we believe there could be some positive reaction, albeit likely to be short-lived," it added.
The shares of leading construction firm, Arabtec, were also up over 7.0 percent, while the stocks of budget airline Air Arabia were up just over 1.0 percent.
Dubai Islamic Bank shares meanwhile 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 4.0 percent.
The recovery followed days of severe battering for leading shares, dropping almost the maximum-permitted 10 percent, as the market remained shaky over Dubai's debt woes.
The market trades on Monday on the eve of the maturity of 3.5 billion dollars of Islamic bonds issued by Nakheel, the huge property arm of government-owned Dubai World -- whose liabilities amount to 59 billion dollars.
Dubai rocked world markets in late November when it requested a freeze on debt payments by Dubai World, in order to restructure the group. Gulf markets also took the news badly.
The economy minister of the United Arab Emirates, Sultan al-Mansouri, said on Saturday that the oil-rich economy will continue to grow, even though at lower rates than earlier years.
He said the gross domestic product of the UAE, which grew 6.2 percent in 2007 and 7.4 percent in 2008, is estimated to witness a growth of 1.3 percent in 2009 and 3.2 percent in 2010.
Meanwhile, the market in Abu Dhabi was up 4.4 percent by midday at 2,612.10 points. All sectors were in the green, with real estate surging over 8.0 percent and banking up almost 6.0 percent.
In Saudi Arabia, the largest Arab bourse opened slightly up, but then slipped by 0.14 percent at around 0830 GMT.
All sectors were marked in red, except for petrochemicals which was up 0.29 percent and energy and utilities, which increased 0.06 percent.
Qatar stocks traded 0.98 percent up by midday after gaining 1.99 percent on Thursday, the last day of trading for the week.
Kuwait Stock Exchange was up 1.15 percent.