DUBAI: Abu Dhabi bank stocks rose on Thursday on improving outlooks for the United Arab Emirates economy, lifting the benchmark to a 23-week high, while all other regional markets ended lower.
The government of Dubai launched a $500 million 10-year bond on Wednesday with the emirate preferring to issue a smaller size in return for a better price.
"Macroeconomic indicators in Dubai are changing towards the better. Also, positive sentiment from the bonds roadshow will definitely back the banking sector," says Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co.
Abu Dhabi’s Tourism Development & Investment Co has appointed banks to sell bonds from its existing $3 billion bond program with road shows planned in the last week of June or early July, according to sources.
Abu Dhabi Commercial Bank added 2.2 percent and First Gulf Bank rose 1.7 percent.
Aldar Properties climbed 1.5 percent,
"We can assume that if the banking sector is getting into new price levels, the next followers will be real estate," Jaouni said, adding this is the usual trend in UAE markets.
Bank such as Emirates NBD and ADCB have rallied as traders bet an improving domestic economy will boost bank earnings, but property and construction stocks have lagged.
Abu Dhabi’s index rose 0.7 percent to its highest close since Jan 9. The benchmark is up 1.5 percent in 2011 to be the top performing Gulf Arab index.
In Qatar, Aamal Co fell 0.7 percent to a four-week low after the diversified trading, property and industrial company postponed plans to list in London.
The stock is not on the index, which fell 0.8 percent as investors booked gains from Wednesday’s three-week high.
Industries Qatar slipped 1.4 percent, Qatar Telecom was down 1.3 percent and Qatar Islamic Bank retreated 1.1 percent.
Investors are betting on a possible upgrade to emerging market status by index compiler MSCI, which may help boost the index. UAE is also under review, with a decision due on Tuesday.
"(The market) will have a positive momentum ahead of the MSCI decision," said Jaouni.
Egyptian shares declined for a second day after breaking a six-day rally as the index retreated from a resistance level.
The retreat was led by heavyweight Orascom Construction Industries, which shed 1.4 percent.
"The market has been testing 5,600, a major resistance level, but it’s clear it has no support above it," said Omar Darwish of CIBC Brokerage.
The main index fell 0.3 percent to 5,542 points.
Foreign institutional investors sold Oman bluechips, weighing on the index as the Greek debt fuelled global concerns.
The benchmark ended 0.5 percent lower. Losers outnumbered gainers 15 to four.
"There was some selling from foreigners, which indicates the movement in global markets is the driver for selling," said Adel Nasr, United Securities brokerage manager.
Worries that Greece’s debt woes might spiral into a global crisis pounded stocks for a second day on Thursday.
Bank Muscat fell 0.9 percent, Renaissance slipped 0.5 percent and Bank Sohar lost 1.4 percent.
