Local markets rose even after UBS downgraded the UAE, citing lacklustre growth and declines in return on equity for shares of publicly listed companies.
The country was removed from UBS's "preferred country basket," citing a lower growth compared with other frontier markets.
"The UAE market no longer makes returns above its cost of capital," the Swiss bank said in a note to clients. "Uncertainty around the MSCI decision on June 21 to reclassify UAE as an emerging market adds to the risk short term."
Oman, Qatar and Lebanon will remain in the "preferred country basket," it added.
The Abu Dhabi Securities Exchange General Index rose 0.4 per cent to 2690.05 points, led by ADCB. The Abu Dhabi lender rose 3.6 per cent Dh3.14, shares have risen TK per cent so far this week as the bank proceeded with the sale of its 25 per cent stake in Malaysia's RHB.
The Dubai Financial Market General Index was little changed at 1564.88 points.
Elsewhere in the region, Kuwait's index was unchanged at 6314.10. Bahrain's measure added 0.5 per cent to 1339.16. Oman's benchmark added 0.1 per cent to 6053.32. Qatar's index added 0.8 per cent to 8183.50. The Saudi Tadawul All-Share Index was unchanged at 6659.64.
halsayegh@thenational.ae