Dubai index outperforms emerging markets amid Fed hike
Traded value robust as shares worth Dh300 million changing hands
Dubai: The Dubai Financial Market General Index outperformed the rest of emerging markets on Thursday, on the back of strong buying in heavyweights a day after the US Federal Reserve hiked rates. It closed 1.81 per cent higher at 2,825.76, after hitting an intra-day high of 2,832.56, a level last seen on September 9.
Traded value in Dubai doubled to Dh344 million from the previous session’s Dh185 million. This performance dwarfed the gains in MSCI Emerging Market Index, which rose 0.22 per cent to 1,048.28. Most of the strength to the Dubai index came about due to buying in Emirates NBD, Dubai Islamic Bank (DIB) and Emaar Properties.
“The Fed rate decision is broadly positive for all banks, including ENBD, but this was expected, and I do not believe this event has influenced today’s rally materially,” said Nishit Lakhotia, head of Research at SICO Bank.
The Fed raised rates on Wednesday by a quarter of a percentage point to 2-2.25 per cent. Analysts expect profitability on bank loans to increase, as there is a greater spread between the federal funds rate and the rate a bank charges customers. Emirates NBD closed 6.15 per cent higher at Dh9.50, while DIB closed the week 1.13 per cent higher at Dh5.39.
Stock indices in the Gulf were also in the positive, unlike its global emerging and developed market peers.
The Abu Dhabi Securities Exchange rose 0.36 per cent at 4,947.92 due to buying in Etisalat.
Saudi Arabia’s Tadawul index closed 0.07 per cent higher at 7,898.68.