Dubai: UAE market indexes registered their highest close in more than three years amid positive investor sentiment buoyed by a rise in banks and real estate companies’ share prices in anticipation of first quarter earnings.
The Dubai Financial Market General Index advanced 2.42 per cent to end at 1962.92, its highest level since November 2009. The Abu Dhabi measure closed 0.60 per cent up to 3088.39, its highest since October 2009.
The recent rally is reflection of the continuing improvement in the fundamentals of the economy, said Rami Sidani, head of Mena investments at Schroder’s.
“To add to this, we strongly believe that the first quarter results will be supportive to the rally we have seen,” said Sidani.
Dubai Islamic Bank continued its surge, gaining 6.67 per cent to close at Dh2.56. The UAE’s biggest Sharia compliant lender is up more than 17 per cent since its April 7 announcement that it repaid a loan of Dh3.8 billion to the government.
“The analysts’ expectations on DIB have been little bit lower, but that has begun to change after its [repayment] announcement,” said Saleem Khokhar, head of equities at National Bank of Abu Dhabi.
Drake and Scull International, the Dubai-based engineering company catering mainly to the construction industry, jumped 5.15 per cent to Dh0.816 amid speculation among investors it will report better first quarter earnings and win more contracts.
Emaar Properties rose 2.06 per cent to Dh5.45 and 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 “valuations of companies that are growing their earnings are still quite reasonable,” said David Varghese, fund manager at Emirates NBD Asset Management.