Dubai, Abu Dhabi bourses hit fresh five-year highs

UAE stock markets surge as investors bet on bullish 2014 outlook
Dubai, Abu Dhabi bourses hit fresh five-year highs
By Reuters
Mon 30 Dec 2013 05:31 PM

UAE markets surged on Monday in an unusual year-end trend as investors bet on a bullish 2014 outlook, while Egypt's bourse halted a two-session decline after the government defined a timeframe for presidential and parliamentary elections.

Abu Dhabi's index climbed 1.6 percent to a fresh five-year high, taking year-to-date gains to 62.3 percent, in its biggest one-day gain in three-and-a-half months.

The bourse played catch-up to advances on neighbouring Dubai's bourse, which has risen 105.4 percent in 2013.

"It's a bit unconventional for such movement at the end of the year," said Marwan Shurrab, fund manager and head of trading at Vision Investments.

Dubai's measure rose 1.4 percent, also hitting a new five-year high, recovering from Sunday's 0.6 percent dip.

"Turnover was not high yesterday, which shows willingness of investors to hold positions going into 2014," Shurrab said.

A strong recovery in Dubai's property sector acted as a springboard for Dubai measure's performance in 2013, as has its macro outlook, which has further improved due to the city-state winning rights to host the World Expo 2020 and MSCI's decision to include UAE to its emerging market index.

In Egypt, the benchmark index added 0.1 percent. It halted two sessions of losses after Egypt's interim president said on Sunday the government will hold parliamentary and presidential elections within six months of approval of the new constitution, to be voted on next month.

"If the constitution referendum passes in a very strong way, it will be the next trigger for the market," said Mohamed Radwan, director of international sales at Pharos Securities.

A majority vote could act as a counterbalance for the recent violence. On Sunday, a bomb exploded outside an Egyptian army building north of Cairo, the second such attack on security forces in the Nile Delta in less than a week.

Investors will remain cautious if the bombings continue although the market has been resilient, Radwan added.

In Saudi Arabia, petrochemical and cement shares helped boost the index, which advanced 0.3 percent.

Positioning for earnings and dividends lifted the petrochemical sector's index 0.5 percent and cement's by 0.7 percent.

Elsewhere, Kuwait's measure slipped 0.6 percent, slumping to its lowest close since Sept. 10. The market has been on a downtrend since early November as investors, disappointed at the government's pace of implementing development projects, cut positions.

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