Dubai: The Dubai index, which shed about 14 per cent last week, has thrown up good bargains in select sectors, even as markets stabilise.

On Wednesday, the Dubai Financial Market General Index rose as much as 2.8 per cent before ending 2.34 per cent higher to be at 4,545.91. That adds to previous session’s 1.5 per cent gains.

“We expect market to stabilise. There are good bargains to buy in the market and the volatility should ease a bit,” said Sebastien Henin, head of asset management at The National Investor.

In the past four weeks, European stocks led a rout that helped erase as much as $5.5 trillion from equities worldwide amid concern that a potential recession in the region would undermine growth as the Federal Reserve winds down its asset-purchase program.

Both WTI and Brent had plunged more than 20 per cent from their June highs, meeting the common definition of a bear market. However, on Wednesday, brent for December settlement rose 73 cents, or 0.9 per cent, to $86.95 a barrel.

Good bargains in banks:

Bank stocks are expected to outperform in Dubai markets.

“Banking sector looks like a good bargain, we expect banking sector to outperform in coming days. For the past weeks, banks have underperformed the regional equity indices, so we expect them to outperform,” said Henin.

Banks are expected to report higher earnings supported by lower provisions and strong loan growth in the consumer banking business. With the rising business confidence in the corporate sector, recovery in the real estate business and increased government spending are expected to drive asset growth and profitability of UAE banks according to SICO, a Bahrain-based investment bank.

In the UAE, credit growth in the banking sector was about 4 per cent for the first six months of this year. Analysts expect the overall credit for the year to be about 7 per cent with a stronger outlook for next year. Credit rating agency Standard and Poor’s expect around 8—9 per cent credit growth for the sector in 2014-2015, in line with healthy economic activity driven by strong government spending, and non-oil private sector growth.

“We have good results from banks led by Emirates NBD, which should add to positive environment,” Henin said.

Emirates NBD, the largest bank in UAE by total income and branch network, on Wednesday reported a 51 per cent increase in the net profits to Dh3.9 billion for the first 9 months of 2014. Shares of Emirates NBD ended 2.2 per cent higher.