The benchmark gauge of Dubai, the DFM General Index has rallied to the highest level in last 3 years and Emaar Properties is to be thanked for this amazing growth. Today’s surge was mainly led by Emaar after investors expressed their optimism on a possible real estate sector recovery in the Emirates. It is also expected that the industry will boost further in 2013.
Emaar, which is the developer of the biggest skyscraper in the world, got its price estimate increased at the HSBC Holdings. The shares of the company increased by 5.7%. On the other hand, the biggest lender in United Arab Emirates by asset value, Emirates NBD PJSC, experienced its biggest increase in stock values of this month. The benchmark gauge also went ahead by 2.2% and is currently at 1899.51. This marks its highest level since November, 2009.
According to the Senior International Trader of Al Ramz, Saad al Chalabi, the stability in the real estate industry is good enough for a continued equity growth in this Asian country. He added that most of the stocks which are on the bourse are under the book value. Incidentally, in last month, Dubai stocks experienced a gain of 16% and this marks the best start of the exchange since 2000, when it started its operations for the first time. The property market of Dubai is currently on a recovery mode as the different industries such as hotel, restaurant and tourism – all saw growth for the first time since the 2008 crash. That crash actually caused a tumble of 65% in the home prices in Dubai. In 2012, the Emirates economy is expected to expand by 5%, as far as the Government forecasts are considered.
The current price to book value of Dubai shares is 0.8 times, much lower in comparison to 1.8 times that of Tadawul All Share Index, the benchmark gauge of Saudi Arabia. Incidentally, the benchmark gauge of Saudi Arabia is the largest bourse in the entire Persian Gulf.
The 14 day relative strength index of the DFM General Index has increased to 75 from its previous value of 70. A total of 206 million shares were traded today and this is higher than daily average of last 12 months. According to officials of Shuaa Capital PSC, the positive trend in the property sector of Dubai will continue throughout 2013.