Dubai stocks lead advance in gulf bourses as oil roses above $40
Gulf Arab stocks surge after oil, the region’s main source of income, rebounded to the highest level this year.
Dubai’s DFM General Index led the advance, rising 1.5 percent as of 12:41 p.m. local time to 3,438.30, the highest level since November. The gauge has breached its 50 percent Fibonacci level, which shows what percentage of a loss a security has recovered from a low to a high, a sign the rally may continue. The Bloomberg GCC 200 Index, which tracks the biggest and most liquid stocks in the six-nation Gulf Cooperation Council, increased 0.7 percent, gaining for a third day.
Investor confidence in the region has been building after oil, which funds the bulk of government spending, recovered from the lowest in more than a decade. While countries including Saudi Arabia are seeking to diversify their economies away from crude, growth remains largely driven by energy income. The kingdom, which halted payments to contractors as it slashed spending amid oil’s slump, said it will pay almost all of its outstanding dues.
“The Saudi government’s announcement that it’s settling some debts to construction contractors should benefit Emirati companies operating in the kingdom,” said Nabil Farhat, an Abu Dhabi-based partner at Al Fajr Securities. That, along with oil’s bounce, is driving the rally, he said.
Dubai Contractors
Brent crude, a benchmark for half the world’s oil, surged 6.4 percent on Friday to $41.94 per barrel as U.S. crude production slid for the 10th time in 11 weeks through April 1, according to data from the Energy Information Administration on Wednesday.
Dubai’s gauge neared its 200-day moving average, which it hasn’t traded above since August. Drake & Scull International PJSC, an engineering contractor, rose 2.1 percent as 92 million shares traded, about 20 percent of all volume on benchmark index. Union Properties PJSC climbed 2.5 percent on more than three-times the developer’s six-month average intraday volume.
Emaar Properties PJSC, the developer of Burj Khalifa, the world’s tallest tower, added 1.8 percent. The company with the largest weighting on Dubai’s main index said it would use a combination of debt and equity to fund an even taller observation tower in the Middle East business hub.
Abu Dhabi’s ADX General Index rose 0.6 percent. Kuwait’s SE Price Index gained 0.1 percent, and Oman’s MSM 30 Index added 0.6 percent, climbing a seventh day. Qatar’s QE Index fell 0.3 percent.
Saudi Arabia’s Tadawul All Share Index increased the most in a week, rising 1.2 percent led by Saudi Basic Industries Corp. Trading volume on the index was more than 20 percent below the 20-day intraday average.
Source: Bloomberg
