Stocks in Dubai rose on Sunday, with the benchmark index gaining 1.4 per cent following a preliminary nuclear deal reached between Iran and world powers last week.
The gains were led by the real estate developer Damac and Commercial Bank of Dubai.
“There was a sentiment effect of the Iran deal on the UAE, and the markets reacted a bit positively,” said Saleem Khokhar, the head of fund management and head of equities at NBAD Global Asset Management. “But we don’t yet know the timing of the lifting of the sanctions among other things.”
Iran has a historic trading relationship with the UAE. In 2013, bilateral trade between Iran and the UAE was around US$32 billion, according to Bloomberg.
While Yemen is expected to have a limited economic effect on the UAE, along with the Iran deal it would affect the oil prices. Brent crude was at $54.95 per barrel last week, but is not expected to stabilise before 12 to 18 months, according to Mr Khokhar.
Saudi Arabia and its allies, which include the UAE, started bombing Yemen’s Houthi rebel positions last month.
On the Dubai Financial Market, Damac gained 8 per cent following a confirmation that the founder and chief executive Hussain Sajwani had purchased a plot of land in London for a residential project. Damac is set to build a 50-storey mixed-use tower with 450 residential units with office and retail space.
Commercial Bank of Dubai rose 5.69 per cent. Last week it announced the acquisition of a corporate loan portfolio worth Dh3 billion from Royal Bank of Scotland in the UAE.
Drake & Scull International and Dar Al Takaful were among the biggest losers.
In the capital, the Abu Dhabi Securities Exchange General Index rose by a marginal 0.08 per cent, with Foodco Holding shares losing 10 per cent of their value and Arkan Building Materials retreating 9.7 per cent. Their dip was compensated for by Abu Dhabi Ship Building and Dana Gas, which rose 11.1 per cent and 7.3 per cent, respectively.
ssahoo@thenational.ae
