United Arab Emirates stock markets rose on Wednesday on last-minute bets that Dubai would win the right to host the 2020 World Expo. Most other Gulf bourses also climbed, while Egypt extended losses to a nearly four-week low. Dubai's main index advanced 0.5 percent to its highest finish since November 10, although it gave back almost half of its intra-day gains. The measure is 1.8 percent below the multi-year high hit in October.
"Trading in the last month has been more cautious but people are pricing in the Expo win until right before the results," said Sanyalaksna Manibhandu, senior analyst at NBAD Securities. "Whatever the result, you will see profit-taking."
The winning Expo bid is to be announced later on Wednesday. Many analysts are predicting a short-term rally followed by a sell-off to take profits if Dubai wins, and a steeper sell-off in case of a disappointment.
But buyers may then return before the year-end to re-position for annual dividends and fourth-quarter earnings. "You will see better results for the full year, particularly from the banking sector, because impairments have come down," Manibhandu added.
Trading was heaviest in stocks which retail investors believe would benefit most if Dubai hosts the Expo. Dubai Investments, which owns land around the proposed expo site, rose 3.1 percent. Emaar Properties climbed 1.3 percent and Union Properties added 2.7 percent.
The optimism spread to neighbouring Abu Dhabi, with the index there also rising 0.5 percent. Abu Dhabi National Building Materials jumped 8.9 percent; the stock is now up 116 percent this year, following five years of losses. Qatar's benchmark meanwhile rose 0.8 percent to 10,353 points, a one-week high and near the year's peak of 10,445 points.
Investors are positioning themselves for annual dividends, which will be announced with fourth-quarter earnings in early 2014. Qatar National Bank and Industries Qatar climbed 1.8 and 1.5 percent.
In Egypt, the benchmark index declined 0.6 percent to its lowest close since November 3. The market dropped for a fifth consecutive session from a 34-month high.
Profit-taking was exacerbated by the government's apparent difficulty in the transition back to civilian rule. Arrests of activists after new regulations on protests have shaken support in some quarters for the military-led interim government.
"The market plunged on noise about the pace of political progress...Prices should hold at these levels as the profit-taking phase is over," said Mohamed Radwan, director of international sales at Pharos Securities.
Egypt will hold a referendum on an amended constitution in December, the group drafting it said on Tuesday. That contradicted a statement on Sunday by the prime minister, who said it would be held in late January.