UAE stocks buck bearish trend in Asian markets

Dubai: The UAE markets bucked the trend of falling Asian markets, extending its rally for the third straight day in a bear market in the hope that the US Congress would approve the bailout package and aid in restoring confidence in the global financial system.

The Dubai Financial Market General Index rose 1.66 per cent to 4,127.62. Of the 31 stocks which traded, 19 advanced, 10 declined and two remained flat. Turnover jumped from Dh695.53 million to Dh1.41 billion, up 102.09 per cent.

The Abu Dhabi Securities Exchange Index gained 0.42 per cent to close at 3,956.72. Losers pipped gainers 18 to 17 with three stocks unchanged. Value of shares traded fell 15.55 per cent to Dh645.59 million.

"Now that there seems to be a bit more progress on the $700 billion package with the Congress going to vote on it and the result of that is the markets here reacted positively to that," said Haissam Arabi, managing director of Shuaa Capital's asset management division.

"They are expecting it to be passed as a law and so our markets simply rallied on that news."

In Abu Dhabi, speculation on the possible merger of Abu Dhabi Commercial Bank and National Bank of Abu Dhabi gathered momentum among investors, despite denials by the management of the banks.

ADCB soared 8.62 per cent to close at Dh3.53 and NBAD also gained, up 1.71 per cent to Dh14.85.

"Don't forget that we have a liquidity squeeze and strengthening the balance sheet and merging the more aggressive banks with the conservative banks will create some kind of a balance and aid in the availability of liquidity," said Arabi.

"Plus from a valuation perspective, given that some banks may have some cash in their capital, there's no better time than now to buy when P/E is at five or six times earnings... realistically whether [the merger] is going to happen I don't know, but does it make sense, yes, it does."

The gainers on DFM included Emaar Properties, up 3.33 per cent to Dh7.75. Gulf Finance House surged 14.98 per cent to Dh11.90 and Tabreed climbed 3.80 per cent to Dh1.64.

On ADX, Aldar Properties was down 2.45 per cent to Dh7.97. Sorouh Real Estate edged down 0.15 per cent to Dh6.80. etisalat closed 0.90 per cent up at Dh16.75.