First Abu Dhabi Bank
AB shares rose 3 per cent to end at Dh15.38. Image Credit: Gulf News archive

Dubai: First Abu Dhabi Bank shares surged on Tuesday after the MSCI rebalancing as domestic traders bought in the stock, triggering more than 2.5 per cent jump in the Abu Dhabi index.

FAB shares rose 3 per cent to end at Dh15.38. The Abu Dhabi Securities Exchange general index closed 2.67 per cent higher at 5,130.75, after hitting a high of 5,130.75, a level last seen on August 4.

Domestic investors support

In the August rebalancing, FAB’s weighatge was reduced to 0.21 per cent from the earlier 0.22 per cent, resulting in the a minute reduction in the overall Abu Dhabi index weighatge on the emerging market index. Arqaam Capital pegged the outflows to be at $100 million.

“Today’s MSCI rebalancing saw outflows from Emerging Markets including UAE and Qatar to make room for Saudi Arabi. And so, we believe FAB stock (+3.2%) was supported by domestic investors,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital told Gulf News.

Earlier, FAB had disclosed of removing the foreign ownership limit after the United Arab Emirates started loosening rules to attract international investors. “The big deal remains how MSCI treats the proposed increase in the Foreign Ownership Limit to 100 per cent, which can potentially drive in more than $1 billion,” Bhandari said.

In other stocks part of the emerging market index, Abu Dhabi Commercial Bank closed 4.3 per cent higher at Dh8.35. Etislat closed more than 2 per cent higher at Dh16.52.

The Dubai Financial Market general index closed 0.82 per cent higher at 2,751.29. Traded value surged to Dh262 million, compared to 30-day average of Dh130 million.