Convergence of good news comforts Dubai investors

Dubai: Dubai investors drew comfort from a convergence of good news which provided a break from their losing streak.

The US rescue of Citigroup brought some respite to investors worldwide. Closer to home, it was Emaar Chairman Mohammad Al Abbar's statements of the emirate's debt obligations compared to the value of its assets that buoyed sentiments, sending the Dubai benchmark 2.62 per cent higher to close at 1,862.37.

"It has been a mixture of domestic and international problems, and both messages came at the same time and the right time," said Tariq Qaqish, fund manager for asset management group Al Mal Capital.

"The Dubai government saying that its debts are way below the value of assets was important and the bailout of Citigroup, with its presence in the region, provided comfort to investors."

Bailout

Citigroup was bailed out with a $326 billion (Dh1,196.4 billion) package.

Real estate stocks led the way on both Dubai and Abu Dhabi exchanges.

Emaar Properties, the Arab world's leading property developer with operations in 18 countries, gain-ed 3.64 per cent to close at Dh2.56. Deyaar Development climbed 3.13 per cent to Dh0.66.

"The market reacted sharply to Al Abbar's comments right from the start of the session and this led to a strong rally initially," said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage.

"But as the day progressed it was evident that doubts in the minds of investors persisted...It is the investor sentiment that is driving the markets and there is only this much that Al Abbar can do about it."

Arabtec surged 14.97 per cent to Dh3.38 after it said that the company is considering issuing bonus shares to raise additional capital.

The Dubai exchange's own shares slid to Dh1.14.

"It is too early to see whether the market has bottomed out and we have to wait till the fourth quarter results come out in January," said Qaqish. "Till then we will see the markets move sideways."

The Abu Dhabi Securities Index rose 1.08 per cent to 2,730.71, led by increase in real estate and energy shares.

Sorouh Real estate and Aldar Properties gained 4.44 per cent and 4.73 per cent to end at Dh3.06 and Dh5.09 respectively.

"On the ADX front, Aldar and Sorouh are the stocks to watch out for," Jayabhanu said.

"These two real estate stocks are riding high on Abu Dhabi's overall positive environment comparatively speaking."

Dana Gas witnessed activity based on news that it had won new projects in Egypt and Iraq.