Business | Markets
Real-estate companies lead rise of Gulf shares
Gulf shares rose, led by real-estate companies, after an interest-rate cut in China encouraged investors to buy "cheap" developers.
- Gulf News Report
- Published: 14:51 November 27, 2008
- Image Credit: Gulf News Archive
- Real-estate companies led rise of Gulf shares
Dubai: Gulf shares rose, led by real-estate companies, after an interest-rate cut in China encouraged investors to buy "cheap" developers.
Emaar Properties PJSC, the Middle East's largest property developer, rose the most in almost two weeks, while Sorouh Real Estate Co., Abu Dhabi's second-largest property developer by market value, gained for a second day this week. National Bank of Kuwait, the Gulf state's biggest lender, led gains in Kuwait.
Dubai construction firm Arabtec ended limit-up for the third consecutive trading session after it said on Tuesday it would raise its capital through a bonus share issue.
Emaar Properties soared nearly 10 per cent, leading the Dubai index to close up 3.01 per cent at 1,928 points, as investors take heart from a rally in global stock markets.
In Abu Dhabi, the benchmark closed up 1.31 percent at 2,720 points, led higher by Etisalat, which closes up 2.92 per cent.
Sorouh Real Estate and Aldar Properties ended 5.3 per cent and 3.4 per cent respectively.
"The Chinese interest-rate decision has helped to improve sentiments in the region," Nadim Abou Jalad, a trader at Naeem Shares AND Bonds in Dubai, said in a telephone interview on Thursday.
"A strong Chinese economy is good for this region because it will consume more oil. I see some bargains in the real-estate sector because the valuations are cheap."
The People's Bank of China on Wednesday cut its one-year lending rate by 108 basis points to 5.58 per cent, less than three weeks after announcing a 4 trillion yuan ($586 billion) economic stimulus plan.
At the same time, the European Union proposed a 200 billion-euro ($259 billion) spending package.
Before Thursday's gain Dubai's benchmark index was valued at 4.5 times the earnings of its 29 companies. Abu Dhabi's index traded at 6.7 times earnings. The MSCI Emerging Markets Index is today valued at 8 times earnings.
Qatar's DSM 20 Index increased 2.3 per cent, and the Bahrain All Share Index gained 0.7 per cent to 1,920.87, rising from the lowest close since February 2005.
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