Dubai: The UAE's financial markets enjoyed their best trading session in recent months yesterday as risk adverse investors poured their cash back into equities.
The Dubai Financial Market (DFM) General Index jumped the most since July 3, climbing 2.6 per cent to a four week high of 1,415.78, whilst Abu Dhabi's bourse rose 1.51 per cent to 2,508.94, its highest close since October 3.
The gains come after Saudi Arabian shares rose to their highest level since August on Saturday following a deal struck by EU leaders last week to contain the Eurozone's sovereign debt crisis. In the US, the S&P 500 is on track to end its best month in almost 40 years.
Local stocks were further boosted by a flurry of strong third quarter earnings, particularly in the banking and real estate sectors, which helped boost demand for bluechip stocks. Volumes on the DFM hit their highest level in almost five months with more than 206 million shares traded during the session.
"It has been a while since we saw such high volumes; this could be considered a turning point for the market," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments.
Strong volumes
"The DFM has been averaging below 100 million [shares traded] for the past two quarters but yesterday we saw strong volumes to support the surge in most securities. Hopefully, the bourse can sustain these numbers, which would lead to more institutional investors turning their focus back towards the UAE," he added.
Local markets are still underperforming against most international exchanges with the DFM down 13 per cent year-to-date and the Abu Dhabi Securities Exchange (ADX) down 7.7 per cent.
Yesterday, Saudi Arabia's Tadawul All Share Index, the Arab world's most liquid bourse, was little changed, Qatar's measure gained 0.98 per cent, Bahrain's bourse closed flat, Kuwait's index rose 0.11 per cent and Muscat's exchange edged 0.1 per cent higher.
