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Wed 30 Nov 2011 10:21 AM

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Abu Dhabi shares rise to week-high; Dubai ends up

Qatar and UAE benchmarks are hoping to qualified for emerging market status next month

Abu Dhabi shares rise to week-high; Dubai ends up
Qatar and Omans markets traded near-flat

Abu Dhabi’s shares advanced to a one-week high after an
increase of foreign ownership limit at First Gulf Bank boosted optimism
the UAE may be upgraded to emerging market status at MSCI.

First Gulf Bank, the UAE lender controlled by Abu Dhabi’s
ruling family, jumped 2.7 percent.

National Bank of Abu Dhabi, the
second-biggest bank in the UAE, gained to a two-week high. Abu Dhabi’s ADX
General Index rose 0.4 percent to 2,444.86, the highest since Nov 21, at the 2
pm close in the emirate, trimming the drop for the month to 2.3 percent. The
DFM General Index increased 0.6 percent and the Bloomberg GCC 200 Index slipped
less than 0.1 percent.

“The increase in foreign ownership caps at First Gulf shows
that some MSCI requirements for upgrade are being implemented, improving
optimism” that the market could be raised to emerging market status, said
Waleed Al Khateeb, senior finance manager at Dubai-based Daman Securities.
“Poor liquidity remains an issue.”

The UAE and Qatar may be raised to emerging market status at
MSCI next month after the index provider delayed the decision in June. MSCI
cited “stringent foreign ownership limits” such as limited availability of
shares to foreign investors as a concern. About $3 trillion of funds are
benchmarked against MSCI’s indexes globally.

Under existing UAE law, companies are limited to a maximum
49 percent foreign ownership except in free zones.

First Gulf on Tuesday raised its foreign ownership limit to
25 percent from 15 percent. The shares advanced the most since Nov 13, rising
to AED15.15.

National Bank of Abu Dhabi gained 1.4 percent to 10.6
dirhams, the highest since Nov 14.

About 61 million shares traded in Abu Dhabi on Wednesday,
compared with a 12-month daily average of 64 million shares.

Kuwait’s measure advanced 0.2 percent and Bahrain’s gauge
gained 0.7 percent. Qatar’s QE Index and Saudi Arabia’s Tadawul All Share Index
decreased 0.1 percent. Oman’s MSM30 Index declined 0.2 percent.

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