Emaar Jumps Most Since Listing on U.S. Bank Bailout

By Ayesha Daya

Sept. 21 (Bloomberg) -- Emaar Properties PJSC, the Middle East's biggest publicly traded real-estate company, advanced the most since listing following a global rally after the U.S. Federal Reserve and the European Central Bank agreed to inject cash into the financial system.

Emaar soared to its 15 percent limit to close at 8.05 dirhams in Dubai, the biggest one-day gain since March 2000, data compiled by Bloomberg show. Emaar has still dropped 12 percent this month.

``U.A.E. markets are up due to the rebound in global markets following cash injection plans by the U.S. and other governments,'' said Sherif Abdel Khalek, regional sales executive at Beltone Securities Brokerage in Dubai. ``Real- estate stocks are reacting because they are the most volatile and liquid and were most hit as foreign investors withdrew when global markets plummeted earlier this month.''

Aldar Properties PJSC, Abu Dhabi's largest real-estate developer by market value, rose 9.6 percent to 7.77 dirhams, the largest increase since September 2005. The stock has still declined 20 percent in September.

U.S. stocks surged late last week in the biggest two-day global rally in 38 years after the Federal Reserve, the European Central Bank and the Bank of Japan agreed with counterparts in Switzerland, the U.K. and Canada to inject cash into the financial system. Yesterday, the Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Delays in building homes in Dubai due to a shortage of contractors, scarcity of construction materials and cost increases are helping raise property prices in the emirate, EFG-Hermes Holding SAE said in a report today.

The diversion of liquidity from Dubai to Abu Dhabi, the spread of weaker global economic conditions in emerging markets and the declining affordability of property are some of the risk factors that could cause a price correction after mid-2009 and a cumulative decline of up to 20 percent by 2011, EFG- Hermes said.

``All reports on the real-estate sector expect Dubai to see a slowdown in its growth, but a correction of 10-20 percent is not a crash,'' said Abdel Khalek. ``I don't see a real estate crisis. They are bullish about Abu Dhabi.''

To contact the reporter on this story: Ayesha Daya in Dubai adaya1@bloomberg.net