Dubai surges to 5-yr high

DUBAI: Dubai’s shares rose to their highest level in almost five years in heavy trading yesterday yesterday as retail investors bet on small-caps ahead of third-quarter earnings, while other regional markets were mixed. Dubai’s benchmark advanced 1.2 percent to 2,771 points, its highest finish since November 2008, taking year-to-date gains to 70.8 percent. Turnover surged to 1.3 billion dirhams ($354 million), the biggest daily value since a spike on June 3.

“We have a lot of catalysts - real estate is doing well, the Expo 2020 decision is coming up and later, people will start gearing up for the MSCI upgrade,” said Amer Khan, fund manager at Shuaa Asset Management. “Political risk has dissipated and the outlook is positive.”

Yesterday’s rise suggested a break above the August peak of 2,762 points, though another daily close will be needed for confirmation. A double bottom formed by lows dating back to 2009 points the index up to the 3,500-point area in the long term. The World Expo committee will make a decision on Nov. 27 on whether or not Dubai will win the rights to host the world’s fair in 2020. Index compiler MSCI upgraded the United Arab Emirates and Qatar to emerging market status earlier this year, which will bring in fresh foreign funds when it takes effect in June 2014.

In Saudi Arabia, the index declined 0.4 percent, down for a fourth consecutive session to hit a two-week low. Investors sold most large-cap stocks ahead of third-quarter earnings. Analysts and investors are expecting most earnings growth to come from sectors that rely on domestic demand, which benefits from a strong economy and growing population.

The petrochemical sector slipped 0.5 percent; Saudi Basic Industries Corp (SABIC) retreated 0.3 percent. Heavyweight Al Rajhi Bank shed 0.6 percent.

In Egypt, Cairo’s benchmark index slipped 0.6 percent to 5,667 points, easing off a seven-month high. It failed to confirm a break of chart resistance at 5,682 points, the August peak. — Reuters