Investors in Dubai’s equities might be feeling whiplash after the main index went from the day’s worst performer worldwide to the biggest gainer in back-to-back sessions, in response to shifting news on regional tensions and local stocks’ presence in global benchmarks.
The DFM General Index advanced 3.5 percent on Tuesday, gaining more than any other major market tracked by Bloomberg and almost fully erasing a loss of 4 percent the previous day.
The Monday slump followed a “sabotage attack” that damaged two Saudi oil tankers sailing toward the Gulf, on top of US trade war stress that’s hurting investor sentiment globally.
The Tuesday revival was sparked by MSCI’s retention of two Dubai property companies in its main emerging-market stock gauges, preventing eventual fund outflows.
Emaar Malls and Emaar Development, which were both expected to be kicked out in a review by MSCI, jumped 14 percent and 8.1 percent respectively on Tuesday.
“Yesterday, there was the headline effect on the market; nobody knew exactly how things would turn out” with regional security tensions, Ali El Adou, the head of asset management at Daman Investments in Dubai, said in a written response to questions. “But as nothing major came, it makes sense to see investors come back and buy shares that are trading at a very attractive valuation.”
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