Dubai's bourse rose to a new multi-year high on Wednesday on the back of banking and property stocks, while markets in Abu Dhabi and Qatar slowed their advance as they neared February peaks. Dubai's benchmark added 1.2 percent on increasing turnover, reaching its highest level since September 2008. Union Properties rose 5.7 percent and another property developer, Deyaar, surged 8.3 percent.
The emirate's property prices rose about 20 percent last year and continue to grow, boosting the profits of developers and construction firms. "A lot of investors want to invest in speculative names, the companies that were badly hit in the previous crisis" which offer the biggest upside potential, said Sebastien Henin, head of asset management at The National Investor. At 2.60 dirhams, Union Properties is still far below its 2008 peak of 5.20 dirhams.
The pick-up in the property sector and improving confidence in the state of Dubai's finances are also helping local banks that have large exposure to real estate and government-related companies. Lender Emirates NBD added 5.0 percent on Wednesday and Dubai Islamic Bank rose 1.0 percent. An annual meeting between conglomerate Dubai World and its creditors was held on Wednesday; if its debt restructuring plan proceeds smoothly, that will benefit ENBD, a big lender to Dubai World. "These names are benefiting from the reassessment of their loan book risk profiles," Henin said. Mobile phone operator du gained 2.0 percent on the final day its shares entitled holders to receive its 2013 dividend payout. Meanwhile, the market in neighbouring Abu Dhabi closed almost flat at 4,955 points as it approached February's multi-year peak of 5,005 points. National Bank of Ras Al Khaimah dropped 6.1 percent after going ex-dividend.
Ras Al Khaimah Ceramics added 1.5 percent and turnover jumped after the company, in a Reuters interview, outlined plans to invest $80 million this year on plant expansions in India and Bangladesh as well as technology upgrades at other plants.
The rally in Qatar, sparked by the adoption of a record $60 billion state budget this week, also slowed in declining turnover. The index closed up 0.3 percent at 11,940 points, marginally above the February peak of 11,917 points but not enough to break that resistance decisively. Egypt's bourse added 0.1 percent after bouncing from a three-week low on Tuesday.
Shares in Telecom Egypt climbed 1.8 percent after the country's telecommunications minister Atef Helmy said the fixed line monopoly would be able to buy a mobile licence for $360 million. The bourse suspended trading in Telecom Egypt at mid-session pending the company's response to its inquiries. Telecom Egypt then published a statement saying it had not received any official offers of the licence.