UAE shares rise sharply in line with US and oil price recovery

Shares in Dubai surged by 4.03 per cent to close at 3,648.45, ending a roller-coaster week down by just 1.7 per cent.

Stocks rose on the Dubai Financial Market on Thursday. Duncan Chard for The National

Stock markets across the Arabian Gulf ended a torrid week on a bright note, as retail investors continued to plough back into equities after a surge in oil prices and a rebound in global equity markets

Shares in Dubai surged by 4 per cent to close at 3,648.45 on Thursday, ending a roller-coaster week down by just 1.7 per cent.

Abu Dhabi’s headline index meanwhile had its best day of the year so far, closing up 3 per cent at 4,461.09.

“There was real buying power and liquidity coming back into the market, unlike earlier in the week when people simply bought and resold on the same day,” said Khaldoun Jaradat, trading manager at Brokerage House Securities in Dubai.

“A lot of retail investors came back into the market in the belief that the worst is over.”

Amlak Finance and Aramex led gains for the day on the Dubai Financial Market, ending up 9.1 per cent and 7.9 per cent, respectively.

Aldar Properties and FGB were among the main gainers of the day in Abu Dhbai, rising 6.9 per cent and 4.4 per cent, respectively.

Stock markets across Asia posted strong gains after a 3.95 per cent rise posted on Wednesday by the Dow Jones Industrial Average, its strongest one-day gain in seven years, as buying power returned to the US market after a six-day losing streak.

US investors took comfort from remarks made on Wednesday by New York Federal Reserve President William Dudley, who said that a September rise in interest rates was now “less compelling”.

Shares in China returned to positive territory yesterday after five consecutive days in the red as the Shanghai Composite ended up 5.34 per cent.

Investor sentiment in the Middle East was particularly affected by rising oil prices, which touched six-year lows earlier in the week. Brent crude was trading up $1.59 at $44.73 per barrel.

The rise in oil spurred a fresh rally in Saudi equities, which plunged 12.33 per cent during the first two days of the week. The Tadawul All Share Index closed up 3 per cent at 7,604.32.

Muhammad Shabbir, the head of equity funds and portfolios at Rasmala Investment Bank in Dubai, cautioned against hopes that volatility in regional stock markets would decrease anytime soon.

“The correction of the past week told us that volatility is here to stay, due to lower oil prices and budget deficits of regional governments,” said Mr Shabbir. “The Fed’s comments will make things a little calmer, but local factors like questions over government budget deficits and low oil prices are here to stay.”

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