Banks and property stocks lifted Dubai and Abu Dhabi’s markets on Wednesday, while other regional bourses were little moved.
Dubai’s bourse added 0.9 % as Emaar Properties and contractor Arabtec Holding rose 0.8 and 2.8 % respectively.
Investment bank Shuaa Capital was the top gainer, surging 14.7 % on bets it may benefit from an expected increase in initial public offerings in the United Arab Emirates. Shuua’s trading volume was its largest of 2014.
The UAE government has indicated it will soon approve a long-awaited companies law that analysts hope will cut the minimum free float in IPOs to 30 % from 55 % at present.
Many family-owned businesses have been unwilling to lose majority control so reducing the minimum free float should encourage more firms to list. The current rules have led some companies to instead look to list abroad.
“There are rumours about more and more IPOs coming back to the market and for Shuaa it’s their core business,” says Sebastien Henin, portfolio manager at The National Investor.
Some market participants said those buying Shuaa on Wednesday were betting it would win a mandate to run the USD 2.5 bln listing of Emaar’s shopping mall unit.
Shares in Shuaa Capital have lagged the wider market’s recovery and at 1.25 dirhams after Wednesday’s rally are still trading at less than an eighth of their 2008 high.
Abu Dhabi’s index rose 0.8 %.
National Bank of Abu Dhabi and developer Aldar Peoperties climbed 2.2 and 5.3 % respectively.
Abu Dhabi National Energy Co (TAQA) fell 4 % , declining for a second day since the company reported a 2013 net loss and proposed no dividend payout.
In Doha, Qatar Islamic Bank was one of the top gainers, up 0.8 % after saying it was in talks to buy a “strategic stake” in Turkey’s Bank Asya.
State-run Bahrain Telecommunications (Batelco) gained 3.1 % after announcing plans to buy back a third of outstanding bonds due in 2020, using excess liquidity from a scrapped acquisition to lower its debt servicing costs.
Oman’s bourse suffered from a technical glitch for a second day but managed to resolve it before the end of the session. Its index fell 0.2 %.