Dubai’s stocks advanced the most in a week amid optimism regional markets will benefit from the Bank of Japan’s revised stimulus as the Federal Reserve winds down its unprecedented bond buying program.
The Dubai Financial Market General Index (DFMGI) gained 1.6 percent, the most since Oct. 26, to close at 4,616.12. Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower in Dubai, led gains with a 4 percent jump. Abu Dhabi’s ADX General Index rose 1.4 percent, the biggest increase in more than three months.
Regional markets followed global stocks higher after the Bank of Japan on Oct. 31 raised its annual target for enlarging the monetary base to 80 trillion yen ($712 billion) from 60 to 70 trillion yen. Japan’s public pension fund, the world’s biggest, also said it would put half of its holdings in local and foreign stocks, with some investors in the Arabian Gulf anticipating the region may benefit.
“Markets here are taking a cue from what we have seen in the U.S. and the rest of global markets,” Sebastien Henin, who oversees $100 million as head of asset management at the National Investor in Abu Dhabi, said today by telephone. “The pension fund is very big and heavily invested in bonds, so it makes sense to allocate more to equities, and that’s lifting investor sentiment across the globe.”
The S&P 500 Index (SPX) and the Dow Jones Industrial Average climbed more than 1 percent to a record at the end of last week.
Markets rebounded today after a decline in oil prices, coupled with the U.S. Federal Reserve’s end to asset purchases, sparked a selloff on Oct. 30. Brent crude, a benchmark for more than half of the world’s oil, retreated for a fourth month in October to close at $85.86. The GCC is home to about 30 percent of the world’s proven oil reserves.
Arabtec Holding Co., the biggest publicly-traded construction company in the United Arab Emirates, added 1 percent to 4.27 dirhams. Emaar advanced to 10.40 dirhams.
In Qatar, the QE Index rose 0.9 percent led by Qatar National Bank, which climbed 1.5 percent. Oman’s MSM 30 Index was up 0.8 percent, Bahrain’s main measure gained 0.2 percent. Kuwait’s SE Price Index was little changed. Iraq’s benchmark ISX General Index jumped 2 percent.
Saudi Arabia’s Tadawul All Share Index advanced for the first time in five days, adding 0.6 percent. Samba Financial Group led the advances, climbing 2.1 percent to 46.74 riyals, the highest close in a month.
Egypt’s EGX 30 Index surged 2.1 percent to the highest in more than three weeks. Telecom Egypt Co., which is 80 percent owned by the government, is said to seek advisers for its 45 percent stake in a local unit of Vodafone Group Plc, according to a company official who asked not to be identified. Telecom Egypt’s shares closed 0.2 percent higher.
The yield on the North African nation’s 5.75 percent debt due April 2020 slumped 20 basis points last month to 4.55 percent on Oct. 31, near a four-year low.
In Israel, the TA-25 Index (TA-25) increased 0.9 percent. Perrigo Co. led gains as it surged to 610.90 shekels, or the equivalent of $160.76, the highest level on record, after its U.S.-traded shares closed at $161.45 on Oct. 31.
“Tel Aviv is chasing the performance of global markets, with the dually listed shares leading rises today,” said Adi Babani, a trader at Bank of Jerusalem Ltd. “We expect the market to continue tracking global markets.”