Share prices in Abu Dhabi touched their highest level this year as UAE markets on Thursday rose for the sixth consecutive session on rising investor confidence in a sustained oil rally. The increase tracked gains across emerging markets around the world. "Oil and global cues are the main drivers right now and investors are not deterred by reports of expensive valuations," said Chahir Hosni, the equity sales manager at EFG-Hermes bank.
Crude has more than doubled from a low in December of $33.87 a barrel, boosting investor confidence in the region and helping Gulf markets to rally from their losses last year. Abu Dhabi's index has risen 26 per cent this year. "You've seen a huge bounce in oil, which is obviously positive in terms of boosting liquidity for these markets," said Bobby Sarkar, an analyst at Al Mal Capital. "The rise in oil prices and a rally in international markets, which seems to be holding up, is good for sentiment here."
The Abu Dhabi Securities Exchange General Index rose 1.4 per cent, while the Dubai Financial Market General Index was up 1.5 per cent. The six-day rally has been largely supported by positive foreign influences, but investors were also encouraged by remarks made earlier this week on Dubai's debt situation by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. Nour al Zoubi, the general manager at MAC Sharaf Securities in Dubai, said: "There is a lot happening locally, which is helping the market to sustain gains."
However, traders said the six-day rally might not be sustained when markets reopened after the weekend break. "Profit taking is expected, but declines will be slight" said Ayman el Saheb, the head of operations at Darahem Financial Brokerage in Dubai. "We have come a long way from levels at the beginning of the year and I expect the market to continue the upward push with profit-taking breaks."
Elsewhere in the region, Kuwait's measure fell 0.8 per cent, Bahrain's index dropped 0.2 per cent and shares in Muscat fell 0.04 per cent. Saudi Arabia's Tadawul exchange is closed for the weekend. skhan@thenational.ae
