Abu Dhabi property developer proposed surprise dividend and hit profit in 2011
Abu Dhabi's Aldar Properties surged to a three-month high on Tuesday after it proposed a surprise dividend and posted profit for 2011
Aldar shares jumped 6.1 percent to their highest level since Nov. 16.
The developer, bailed out twice by Abu Dhabi with rescue packages of about $10 billion, swung back into profit in 2011 on the back of land sales to the government and increased residential sales. It made a net profit of AED642.5 million and proposed a dividend of AED 0.05 per share.
Abu Dhabi's index rises 0.5 percent to 2,479 points, extending year-to-date gains to 3.2 percent.
"Volumes have picked up strongly and Aldar's dividend was a surprise after all the negative news that was coming out about the company, so it could see a very good performance today," said Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi.
This should also spill over into Dubai bellwether Emaar Properties, Haddad says, which is slated to report annual earnings this week.
"We are very close to ending the bearish markets, whether it is the UAE, Saudi Arabia or Egypt," said Haddad.
The Dubai and Egypt index benchmarks hit six-month highs on Monday, while Saudi Arabia's index ended at 6,832 points, its highest finish since May 2010.
"Saudi has been trading in range between 5,200 and 7,000 points for about three years and volumes are picking up as it approaches 7,000 again, which indicates it can break above this level," says Haddad. "From there, it could make a huge upside move."
Dubai ended Monday at 1,522 points and is also nearing a key technical resistance level.
"Dubai is approaching 1,560 points and if it breaks above this it will signal a reversal of the down trend in Dubai," adds Haddad. "We expect the rally will continue and any downside will be an opportunity to buy."
Elsewhere, shares and the euro fell on Tuesday after Moody's warned it could downgrade top-rated sovereigns including Britain, reminding investors that Europe is still deeply mired in a debt crisis despite Athens' steps to avoid a disorderly default.