DFM General Index has surged 5.1 percent so far in July, after five straight months of losses
Dubai’s main equity gauge is poised to record its biggest monthly gain in a year, powered by a revival in the banking sector as better-than-forecast earnings help UAE stocks get out of this year’s doldrums.
The DFM General Index has surged 5.1 percent so far in July, after five straight months of losses. In Abu Dhabi, the ADX General Index is on track to post its largest monthly gain in over two years, up 6.3 percent since the start of the month.
The country’s biggest banks have been leading the rally in both markets. Last week, First Abu Dhabi Bank PJSC delivered forecast-beating results for the quarter ended in June and raised forecasts for the year.
Dubai’s two biggest lenders, Emirates NBD PJSC and Dubai Islamic Bank PJSC, also reported higher-than-expected results, as a recovery in construction activity helped boost lending.
“The UAE has really been lacking a catalyst. From a valuation’s point of view, it’s one the most attractive markets”, said Salman Bajwa, chief executive officer at Emirates NBD Asset Management LTD, in an interview to Bloomberg Television.
“Banks have been coming out with strong numbers,” he said, adding that the country’s real estate companies were still struggling.
Shares in Dubai and Abu Dhabi - the two richest sheikhdoms in a seven-emirate federation that makes up the UAE - have been underperforming those from Saudi Arabia and Kuwait this year as investors seek to gain from the inclusion of the two countries into global emerging markets benchmarks.
Dubai stocks slipped into bear market in May amid concerns over the outlook for the real estate industry, one of the pillars of its economy. The DFM General Index is still down 12 percent this year, more than twice the drop in the MSCI Emerging Market Index.
Here below are gains so far in July for the stocks that have contributed the most to the rally in each market during the month: