A rally in Emaar Properties, Dubai’s biggest listed real estate company, has pushed the stock beyond a key level for the first time since 2017, testing sentiment among investors still wary about the health of the sector.
The shares had climbed 14 percent in February before Wednesday’s session, headed for the best month in three years. The gains have taken the stock beyond its 200-day moving average, a level it held for some five months the last time this happened.
Emaar Properties is seen as a bellwether for Dubai’s real-estate market. The recent recovery comes after a 40 percent drop last year, the worst loss in a decade, as the stock was dragged lower by worries about an increase in supply at a time of falling demand in the emirate.
Emaar Properties’ rally has helped Dubai’s benchmark stocks gauge to bounce back from being the world’s worst performer in 2018. While some analysts and investors see further gains in store for the developer, thanks to attractively low valuations, others point to persistently weak fundamentals.
Ali Adou, the head of asset management at Daman Investments in Dubai, said: “We see a lot of value in Emaar over the long term. From a valuation perspective, the stock has been trading at a deep and unjustified discount to its fair value and emerging-markets peers.”
Yugesh Suneja, an analyst with ADCB Securities LLC in Abu Dhabi, said: "There is still room for upside in the short term," adding that foreigners are becoming more positive on the stock.
Ahmed Badr, head of equities for the Middle East, North Africa at Credit Suisse in Dubai, belived the rally is going to be short-lived.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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