Reuters – Dubai’s bourse surged on Monday, led by real estate-related shares, as investors bet on a further rebound in the emirate’s property prices. Other regional markets were mixed, with Saudi Arabia soft after some high-profile earnings misses.
Dubai’s residential property prices in 2013 rose 22% on average while rents improved 17 percent, consultants Jones Lang Lasalle said in a report on Sunday; they predicted further gains this year, though at a slower pace as new supply comes onstream.
Union Properties climbed 2.7% and Deyaar Development jumped 6.0%. In a fresh sign of optimism in the sector, Kleindienst Group said it had started building a huge resort complex on the World, the man-made archipelago off Dubai’s coast which has been left mostly vacant since the emirate’s real estate crash in 2008.
Arabtec gained 3.6% after the firm said it won a AED5.7bn ($1.55bn) contract to build a resort in the Aqaba area of south Jordan.
Dubai’s index rose 1.5% to 3,670 points, a new five-year high. It is testing technical resistance at 3,625 points, the low of April 2007; a weekly close above that level would confirm a break.
The index is also nearing the 50% retracement of its drop from the January 2008 peak, which lies at 3,807 points and may provide resistance.
In Saudi Arabia, the main index eased for a second straight session from a five-year high as major sectors declined following some disappointing fourth-quarter earnings.
Shares in Savola Group fell 3.1% after the company posted a net profit of SAR 564m ($150.4 million), up 37% from a year earlier but well below analysts’ average forecast of 643 million riyals.
Saudi Basic Industries Corp (SABIC) slipped 0.7%, extending its decline after Sunday’s lacklustre earnings.
“It is proving difficult to find good buying opportunities in the Saudi market right now,” said Sleiman Aboulhosn, investment analyst at ING Investments.
“For petrochemicals, some Q4 numbers were slightly disappointing and others were impressive. But in our opinion, the outlook is good given the continued improvement in product prices.”
In Qatar, the benchmark slipped 0.2%, its second decline since it snapped a 13-session winning streak.
Shares in Qatar Islamic Bank rose 1.9% after it posted a fourth-quarter profit that more than tripled, beating analysts’ estimates.
Some local investors in Qatar may be cashing out to buy into the initial public offer of Mesaieed Petrochemical Holding Co, a unit of state-owned energy firm Qatar Petroleum, the first IPO in the country since 2010. The offer will end on Tuesday.
It is not clear how strong investor demand for the IPO has been so far; a trader familiar with the offer said some investors were waiting for the last days to subscribe because they did not want to tie up their money for a long period.
Qatar Petroleum said in a statement on Monday that the interest from the Qatari investor base “over the past three weeks had been very encouraging”. It did not elaborate.
Egypt’s index added 0.5%, partially rebounding from a 2.0% tumble on Sunday which traders attributed to a burst of profit-taking after months of strong gains.