Dubai Financial Market ends 2013 more than 107% higher than it began the year
Bulls in Dubai were strong until the last minute of trading in 2013 with the shares index recording its biggest annual gain in eight years, while all other regional markets also climbed to end the year on a positive note.
Dubai's bourse rose 1.1 percent to close the year 107.7 percent higher - its largest annual advance since 2005.
Its rise was underpinned by bets on future earnings growth for bluechip firms like Emaar Properties, whose 1.2 percent climb on Tuesday took the year's gain to 103.7 percent.
A strong recovery in Dubai's property sector acted as a springboard for the measure's performance in 2013, as did 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 in its emerging market index from May next year.
"In the medium to long-term perspective, we still see quality in Dubai as the city continues to expand," said Amer Khan, senior executive officer at Shuaa Asset Management. "Any dips in the near term will be well bid."
Abu Dhabi's index gained 0.3 percent to take 2013's advance to 63.1 percent, backed by the UAE's macro recovery.
"The significant opportunities in the GCC are still in Saudi Arabia, UAE and Qatar," said Khan.
Elsewhere, Qatar's benchmark edged 0.1 percent higher, extending 2013's advance to 24.2 percent. While the pace was more measured, the market moved up from a stronger base compared to regional peers.
Some of the gains were due to MSCI's upgrade of Qatar to its emerging market index, which will be draw in some $500 million of additional funds when implemented in May 2014.
Dividends tend to be a key draw for investors in Qatar's market at the beginning of the year but some selling pressure may impact coming sessions from Qataris cashing out to buy into the country's first initial public offering since 2010.
Mesaieed Petrochemical Holding Co, a unit of state-owned energy giant Qatar Petroleum plans to raise QR3.2bn ($878.8 million) from the share sale, which is open only to Qatari citizens and began on Tuesday. The offer period runs until Jan. 21, with trading in the shares expected to start in February.
In Saudi Arabia, the index added 0.2 percent, with 2013 gains at 25.5 percent. Local government spending and an improving global macro backdrop were positive triggers for much of the year but a labour shortage, stemming from a government crackdown on illegal workers, is weighing on the early 2014 outlook for some areas, mainly construction, retail and banks.
"The labour shortage impact will be worst in the fourth quarter for contractors and suppliers, but then there will be growth again," said Hesham Tuffaha, a Riyadh-based fund manager, adding the labour issue will be short-lived and Q4 numbers will give an indication to growth potential in 2014.
Kuwait's bourse rose 0.1 percent, recovering from Monday's three-and-a-half-month low, due to late buying in a move called 'window-dressing', where investors buy shares in last-minute trading to boost the annual performance of their portfolio.
The market, up 27.2 percent for the year, rose in the early months of 2013 on expectations that the government would finally move ahead with a massive development plan. But it gave up about 10 percent of its gains since May, with investors disappointed at the pace of project announcements.
Foreign institutional investors remain scarcely interested in Kuwait, due to political risk factors, weak market regulations and cross-ownership of firms on the exchange.
In Egypt, the index was flat on Tuesday, holding 2013 gains at 24.2 percent. It witnessed a sharp rebound from mid-year levels as investors bet on the recovery of a stagnant economy deeply hit by the political turmoil of recent years.
Billions of dollars in Gulf aid and an improved business environment, along with a roadmap to restore full civilian rule, underpin a positive outlook for Egypt.
Much however, depends on the upcoming vote on a draft constitution in mid-January, with parliamentary and presidential elections scheduled for within six months of its approval.
Elsewhere, Oman's index climbed 0.3 percent, up 18.6 percent in 2013. Bahrain's measure rose 1.6 percent, up 17.2 percent this year.