By Zahra Hankir - Mar 6, 2011 7:02 PM GMT+0700
Dubai shares advanced the most in a month, leading gains in the Middle East, as a rebound in Saudi Arabia’s index yesterday spurred speculation the selloff in regional stocks because of political unrest was overdone.
Emmar Properties PJSC, builder of the world’s tallest tower, increased 2.5 percent and Dubai Islamic Bank PJSC (DIB) advanced the most since October. The DFM General Index (DFMGI) climbed 2.7 percent, the most since Feb. 2, to 1,389.04 at the 2 p.m. close in the emirate. The gauge has lost 15 percent since Tunisia’s President Zine El Abidine Ben Ali was ousted in January. Saudi Arabia’s Tadawul All Share Index (SASEIDX) rallied 7.3 percent yesterday, the most since November 2008, snapping a 13- day losing streak. It gained 0.8 percent at 2:21 p.m. in Riyadh.
“The gains were prompted by what we saw yesterday in Saudi Arabia,” said Sebastien Henin, who helps oversee $110 million at The National Investor in Abu Dhabi. “Investors took this opportunity to buy. Looking forward, there is no visibility as the news flow is very rich and there are tensions across the Gulf Cooperation Council countries.”
Stocks tumbled across the region last week, sending the Bloomberg GCC 200 Index (BGCC200) of Persian Gulf shares to the lowest level since 2009 and propelling the Saudi benchmark index down the most in two years, on concern turmoil in Libya will spread to the kingdom after uprisings erupted in Bahrain and Oman. The GCC 200 measure rose 0.6 percent today.
An increase in oil prices will boost the “strong condition” of the kingdom, Finance Minister Ibrahim al-Assaf told Al Arabiya TV yesterday. Stock prices in Saudi Arabia, which holds about 20 percent of the world’s proven oil reserves, are attractive and the Saudi Public Pension Agency bought shares last week, he said.
Saudi Rallies
Oil rose 2.5 percent to a 29-month high on March 4. Crude oil for April delivery increased to $104.42 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 26, 2008. The six nations of the GCC, including the United Arab Emirates and Qatar, supply about a fifth of the world’s oil.
Shiite Muslims in the eastern province of Saudi Arabia held two demonstrations on March 3 to call for the release of prisoners. Saudi Arabia’s Interior Ministry said demonstrations, marches and sit-ins are “strictly” prohibited under the kingdom’s laws, the official Saudi Press Agency reported March 5, citing an unidentified official at the ministry.
Emaar rose the most since Feb. 2 to 2.47 dirhams. Dubai Islamic Bank gained 4 percent, the most Oct. 20, to 2.10 dirhams.
Bahrain’s BB All Share Index rose 1.3 percent. Kuwait’s SE Price Index climbed 0.7 percent and Abu Dhabi’s ADX General Index (ADSMI) advanced 1.1 percent. Oman’s MSM30 Index (MSM30) increased 0.8 percent. Qatar’s gauge is closed for a holiday.
Egypt Bourse
In North Africa, Egypt stock trading remained suspended today after the bourse postponed plans to resume operations as Prime Minister Ahmed Shafik quit. No date was given for the opening. The bourse has been shut for more than a month amid a popular revolt that toppled the 30-year-old regime of former President Hosni Mubarak. The measure lost 16 percent in the week ended Jan. 27, when it last traded.
“The fact that Egypt’s market is not open today is a very big negative, especially as we do not have an idea of when it may reopen,” said Ahmed Talhaoui, the Abu Dhabi-based head of investment at Royal Capital. “We expect a lot of volatility in regional markets.”
Tunisia’s stock exchange said it will resume operations tomorrow, according to a statement on its website. The market regulator suspended trading on Feb. 28. The benchmark Tunindex has retreated 21 percent so far this year.
In Israel, the TA-25 Index slipped 0.3 percent in Tel Aviv. The benchmark Mimshal Shiklit government bond due January 2020 dropped, pushing the yield on the 5 percent bond up 2 basis points to 5.19 percent.
To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
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