Dubai's bourse at six-week high

Dubai's bourse jumped to a six-week high on Wednesday, as property stocks surged on hopes that Abu Dhabi's decision to restart stalled projects including the Louvre and Guggenheim museum branches would lift the struggling real estate market. Most other Gulf bourses gained in muted trade as investors stayed on the sidelines with many of the big companies yet to report fourth-quarter results.
"Dubai managed to be the best performing market in the region today," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments. "Property stocks continued their rally due to the announcement made by Abu Dhabi to restart projects." Property markets in Dubai and Abu Dhabi have fallen over 60 percent since their peak in 2008. House prices and rents are expected to further decline in most areas this year.
The raft of projects restarted by Abu Dhabi's Executive Council, including the delayed branches of the Louvre and Guggenheim museums, raised hopes of recovery in the sector.
Heavyweight Emaar Properties surged 6.7 percent to a four-week high, Deyaar climbed 4.3 percent and builder Arabtec gained 1.1 percent. "Emaar has not been doing well but the positive sentiment helped it recover all the losses for the month," Shurrab said. After markets closed, Dubai Holding Commercial operations group announced the full repayment of the bond which was due February 1, using its own internal cash flow. "This will fuel a further rally in the markets tomorrow. Along with positive fourth-quarter earnings, we may see a strong end to this month," Shurrab said.
The bourse's own stock, DFM, gained 8.5 percent and top lender Emirates NBD rose 2.2 percent. The index climbed 2.4 percent to end at 1,396 points, its highest close since December 11. Abu Dhabi's index advanced 0.6 percent, help by First Gulf Bank and Abu Dhabi Commercial Bank which climbed 1.3 percent and 2.2 percent respectively. Qatar's ended 0.4 percent higher after retreating for the previous six sessions. Banks led the rally with Qatar Islamic Bank climbing 1.4 percent and Commercial Bank of Qatar (CBQ) adding 3.3 percent.
After the market closed, CBQ reported a 22 percent jump in quarterly profit on higher lending and deposits. Saudi Arabia's index ended up for a third consecutive day, buoyed by banks and petrochemical stocks. Al Rajhi Bank gained 0.7 percent. Advanced Petrochemical climbed 1 percent after it reported a 56 percent rise in net profit for 2011.
Saudi Basic Industries Corp (SABIC) ended flat. A note from Rasmala on SABIC points to a weaker start to the year for the bellwether company, with the investment bank revising its target price to 113 riyals ($30.13) from 115 riyals. "We now assume a somewhat weaker start to 2012 than in our previous forecasts, mainly assuming a lower utilisation rate for SABIC's European operations, but we have not made any changes to our base-case forecast of a 10 percent drop in petrochemicals prices for 2012," the note said. The index ended 0.2 percent higher. Egypt's index was shut to mark the anniversary of last year's uprising which overthrew former President Hosni Mubarak.