Dubai, Abu Dhabi bourses hit new five-year highs

Investor sentiment continues to rise in the UAE on back of real estate recovery, Expo 2020 win
By Reuters
Sun 08 Dec 2013 03:11 PM

Abu Dhabi's small-caps lifted the market to a five-year high as local investors hunted for laggards.

The index climbed 1.3 percent to finish at 3,990 points, its highest close since September 2008. It closed above the resistance of 3,976 points - the August 26 intraday high - and the previous peak.

It needs to record consecutive gains for a clear breakout. It is up 51.7 percent year-to-date, behind Dubai's 88.3 percent surge in the same period.

Recovery in the real estate and banking sector, an upgrade to emerging market status from index compiler MSCI and recently, Dubai's successful bid to host the World Expo 2020 have contributed to lifting investor sentiment and a bullish outlook for the country.

Small-caps Abu Dhabi Ship Building and union cement each jumped 14.8 percent. National Takaful Co rose 14.4 percent.

"There's heavy speculative trading on small-caps which are also cheap," said Hisham Khairy, head of trading, institutional desk at MENA Corp. "Money is pooling into these names in a shift from local investors."

Dubai's index rose 1.4 percent to 3,056 points, a new five-year high. The market crossed the psychologically important level of 3,000 on Thursday, which is adding to the positive sentiment on the country's bourses, Khairy says.

"I would expect money to flow out of Dubai and into Abu Dhabi because the index is still lagging and there are more opportunities for investors to play up prices," he added.

Dubai's Arabtec gained 1.5 percent after the contractor said it was awarded a contract worth nearly $1 billion to build a hospital in Al Ain in the United Arab Emirates with its joint venture partners.

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