Dubai: The Dubai Financial Market benchmark index surged Tuesday to a 40-month high as investors feel optimistic about the upcoming first quarter earnings and the recent action of a bank.

The DFM General Index was up 2.42 per cent to end at 1962.92, its highest close since November 2009.

“We strongly believe that the first quarter results will be supportive to the rally we have seen,” said Rami Sidani, head of Mena investments at Schroders. “The earnings will come in to justify the recent price rally we have seen.”

Dubai Islamic Bank continued its advance, taking its gains to more than 17 per cent since April 7, when it announced that it had repaid the Dh3.8 billion loan to the government, which had provided the lender during the global credit crisis. It rose 6.67 per cent to close at Dh2.56.

Drake & Scull International also continued to rise taking it six-day gains to more than 13 per cent. It climbed 5.15 per cent to Dh0.816, its highest since October 2012. Expectations of the company reporting improved earnings and winning contracts drove the share prices higher.

Emaar Properties rose 2.06 per cent to Dh5.45. Emirates NBD increased 1.95 per cent to Dh4.18.

Interest in high quality names, mainly in the banking and real estate sectors, has been seen from local and international investors, and one reason for that is “companies that are growing their earnings, the valuations are still quite reasonable,” said David Varghese, fund manager at Emirates NBD Asset Management.

Abu Dhabi

Abu Dhabi benchmark index rose 0.60 per cent to end at 3088.39, its highest close since October 2009.

Both the volume and turnover rose sharply from its previous session on Monday. The volume increased from 59.49 million shares to 181.57 million and turnover almost doubled from Dh113.29 million to Dh224.23 million.

Of the 29 shares traded, 16 gained, 10 declined and three remained unchanged.

Banks and real estate sectors in Abu Dhabi continued to gain, reflecting the continuing improvement in the fundamentals of the economy.

Among the gainers were First Gulf Bank, Abu Dhabi Islamic Bank, National Bank of Ras Al Khaimah, Sorouh Real Estate and Aldar Properties.

FGB was up 1.38 per cent to Dh14.65; ADIB climbed 3.8 per cent to Dh3.55; Rak Bank advanced 2.20 per cent to Dh5.10; Sorouh and Aldar gained 1.75 per cent and 0.71 per cent respectively.

Among the losers were Bank of Sharjah, declining 5.80 per cent to Dh1.30 and Ras Al Khaimah Ceramics, the world’s biggest ceramics manufacturer, dropping 4.26 per cent to end at Dh1.80.