Dubai: Dubai’s stock benchmark index closed at its highest in more than five years as the government announced regulations in the holiday home rental market that is expected to provide further boost to the strongly recovering real estate and tourism sectors.
The Dubai Financial Market (DFM) General Index closed 1.41 per cent higher to end at 3055.95, its best close since October 2008.
The most active stocks in terms of value traded included Emaar Properties, the company that has the biggest weight on the index and Arabetc, the region’s biggest construction company, a unit of which won a contract to build a $900 million hospital. Emaar jumped 3.07 per cent to Dh6.71 and Arabtec rose 1.52 per cent to Dh2.67.
The Department of Tourism and Commerce will start issuing short-term licences to landlords and investors who plan to rent out their furnished homes, according to state agency WAM.
“This is supportive for both the real estate fundamentals in Dubai and the general tourism sector,” said Rami Sidani, head of Portfolio management, Middle East and North Africa at Schroders. “Given the strong growth in tourist numbers, in the short term this will allow to increase room capacity, it will be regulated and it will definitely encourage investors as better yields will be achieved.”
Last Thursday, DFMGI crossed the important psychological mark of 3000, for the first time in five years, closing at 3013.34. Positive sentiment has led to the index surging 87 per cent this year, making it one of the best performing equity markets in the world. The market received a further boost on November 27 when Dubai won the rights to host the World Expo in 2020.
It is a continuation of the positive momentum as the index moved to a new high on Thursday.
“Today’s advance provides further confidence that the bull trend is continuing, and is likely to draw more investors into the market to enable further upside gains,” said Bruce Powers, a trader and analyst, who writes a weekly column for Gulf News.
Real estate and energy stocks pushed the Abu Dhabi stock measure to advance 1.27 per cent to 3989.62. Aldar Properties, Eshraq and Ras Al Khaimah Properties were among the major gainers.
