Dubai Stocks Increase on Crude Oil Price

Dubai stocks have experience the biggest rise within last 3 weeks on bets that last week’s drop was kind of overdone. The outlook for earnings is positive and the crude oil price has increased as well, thereby providing more support to the positive sentiment all over the Dubai stocks. The benchmark gauge DFM General Index has increased by 1.5% and is currently at 1909.39. This is the biggest rise for the gauge since 19th February. Incidentally, last week, for the 1st time in 4 weeks, the stocks experienced a weekly decline.

According to the Senior Finance Manager of Daman Securities LLC, Waleed Al Khateeb, last week’s profit taking was sort of excessive, especially when the earnings outlook has been so positive. Waleed added that the general sentiment on the Dubai stocks is very strong and the global stocks’ performance of last week helped the Dubai shares as well.

Incidentally, after last week’s drop, the average price-to-book value of Dubai shares was at 0.8 times, compared to 1.8 times of that of Tadawul All Share Index, the benchmark gauge of Saudi Arabia. The 31 companies listed in the measure trade of Dubai is around 10.7 times of the estimated 2013 earnings, whereas, the same is 11.3 times of that of the Saudi gauge.

In 2013, EMAAR has been the best stock in Dubai’s gauge as it was highly helped by recovery of the property market of the Emirates. In 2008, the property market experienced a big-time low as the prices tumbled by more than 65%. In 2012, the Dubai economy is expected to have increased by 5%, which marks the fastest pace in last 5 years. According to Government forecasts, different industries such as hotel, tourism and restaurant have picked up in last year.

On the New York Mercantile Exchange, crude oil for April delivery gained around 1.4% and the price per barrel went up to $91.95. Incidentally, the oil exporters from Gulf Arab supply almost a fifth of the total oil in the world. The MSCI Emerging Markets Index increased by 1.2% in last week, marking its best 5-day gain since this year’s first week.

EMAAR shares soared to its highest value since October, 2008. On the other hand, the largest builder in Emirates by market value, Arabtec Holding Co. gained 0.9%. Only last week, it experienced a huge decline of 21%.