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Bulls tighten grip on UAE stocks as bailout deal cheers investors
UAE stocks rose for the second consecutive day on Sunday on news that US lawmakers have reached a breakthrough on the much anticipated bailout package, seen as crucial to staving off a global financial crisis.
- By Gaurav Ghose, Financial Features Editor
- Published: 20:48 September 28, 2008
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US landmark bailout deal near
US Congressional leaders say landmark bailout deal near
Dubai: UAE stocks rose for the second consecutive day on Sunday on news that US lawmakers have reached a breakthrough on the much anticipated bailout package, seen as crucial to staving off a global financial crisis.
Locally, the UAE Central Bank's statement that banks could withdraw 100 per cent from their reserve requirements eased liquidity constraints.
Rumours of a possible merger of Abu Dhabi's two largest banks - Abu Dhabi Commercial Bank and National Bank of Abu Dhabi - also led investors to do some buying.
The Dubai Financial Market (DFM) General Index closed up 2.47 per cent to 4,060.38. Of 28 stocks traded, 18 went up, 8 declined and 2 remained flat.
The Abu Dhabi Securities Exchange Index advanced 103.34 points or 2.69 per cent to 3,939.98. Twenty stocks advanced, nine declined and two remained unchanged.
"The rumour of the two banks merging has been doing the rounds from time to time and this is not new," said Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage.
"The market is taking anything positive, even if it is a rumour, as an excuse to buy in a depressing environment. The share prices of both banks shot up in the early part of trading but came down later."
Abu Dhabi Commercial Bank closed up 6.91 per cent to end at Dh3.25. National Bank of Abu Dhabi rose 4.29 per cent to Dh4.29.
"And the news of the American Congress reaching a deal - that's positive news and the market would welcome any news like that," Jayabhanu said.
Volumes and turnover tumbled on both bourses.
On the DFM, volume slid 21.15 per cent to 174.86 million and value of traded shares fell from Dh930 million to Dh695.52 million.
On ADX, the volume and turnover decreased 36.96 per cent to 136.18 million shares and 48.78 per cent to Dh764.51 million.
"This is no trend buying at all," said Jayabhanu. "Seeing our counter, it is mainly some institutions who are picking up. Not long-term investors."
First Gulf Bank also ended in positive territory, up 2.17 per cent to close at Dh16.50.
On DFM, Emirates NBD, the largest UAE bank by assets, gained 4.79 per cent to Dh8.75. Dubai Islamic Bank topped the list of gainers, advancing 5.63 per cent to Dh5.82.
Real estate stocks also gained. Emaar Properties and Aldar Properties, the most liquid stocks on DFM and ADX respectively, gained 3.02 per cent and 3.16 per cent.
Emaar closed at Dh7.50 and Aldar ended at Dh8.17. Sorouh Real Estate went up 6.91 per cent to Dh6.81. Union properties advanced 2.04 per cent to Dh3.00.
etisalat was up 3.11 per cent to Dh16.60.
Markets: Gulf shares advance
Arabian Gulf shares advanced after US lawmakers said they made a breakthrough in talks on a $700 billion plan to revive the credit markets.
Kuwait's central bank said it was ready to provide liquidity to the country's banking system if required. The Kuwait Stock Exchange Index ended a four-day drop, rising two per cent.
Industries Qatar, the largest publicly traded company in the country, gained 3.1 per cent to 137.7 riyals.
Saudi Arabia's Tadawul All Share Index climbed 3.7 per cent to 7,251.34, after falling 7.8 per cent in the previous five days.
Sabic added 2.8 per cent to 102.75 riyals.
Oman's Muscat Securities Market 30 Index increased 0.3 per cent, while the Bahrain All Share Index fell 0.2 per cent.
"What happens in the US is very important because the more institutions go bust there, the higher is our companies' risk of exposure," Mohammad Ali Yasin, the managing director of Shuaa Securities in Dubai, said in a telephone interview yesterday.
"We've also seen liquidity returning through government institutions as more people understand the UAE central bank's plan."
- Bloomberg
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