U.A.E. Shares Rebound on Fed's Bailout Plan; Emaar, NBAD Climb

By Zainab Fattah

Sept. 21 (Bloomberg) -- United Arab Emirates shares advanced after the U.S. government announced a plan to buy $700 billion in bad mortgage investments from financial companies to purge banks of bad assets.

Emaar Properties PJSC, the Middle East's biggest publicly traded real-estate company, jumped. National Bank of Abu Dhabi PJSC rose the most almost eight months and Bank Muscat SAOG also surged.

``The Fed's bailout will write off bad debt which is great news and gives banks the opportunity to recover,'' said Haissam Arabi, a Dubai-based managing director of asset management for Shuaa Capital PSC who oversees $1.8 billion.

The Dubai Financial Market General Index climbed 7.8 percent to 4,219.52 at 11:01 a.m. local time, its biggest one- day gain since Jan. 23. The Abu Dhabi Securities Exchange General Index added 5.4 percent. Oman's Muscat Securities Market 30 Index rose 4.9 percent, heading for its largest gain since November 2000.

U.S. stocks surged on Sept. 19 in the biggest two-day global rally in 38 years as the government announced plans to purge banks of bad assets and crack down on speculators who drove down shares of financial companies.

The Treasury late yesterday clarified the types of assets it would purchase. Treasury Secretary Henry Paulson would have authority to buy home loans, mortgage-backed securities, commercial mortgage-related assets and, after consultation with the Federal Reserve chairman, ``other assets, as deemed necessary to effectively stabilize financial markets.'' Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill.

Emaar jumped 14 percent to 7.99 dirhams, its biggest gain since June 2005. Emaar Misr for Development SAE, a unit of Emaar, will invest 12 billion Egyptian pounds ($2.1 billion) in a luxury real-estate project in Cairo, Al-Alam al-Yom said, citing the company's Chief Executive Officer Sameh Mohtadi.

National Bank of Abu Dhabi, the U.A.E.'s second-biggest bank by assets, surged 7 percent to 16 dirhams. Bank Muscat, Oman's largest lender, soared 7.7 percent to 1.216 rials.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net.