Reuters – Shares in Dubai’s Emaar Properties surged to a 65-month high on Thursday after the firm regained its investment-grade credit rating, while Egyptian shares rose amid a regional uptrend on expectations that the army chief would run for president.
Emaar, Dubai’s largest developer, jumped 4.7% to 8.30 dirhams. Standard and Poor’s raised its long-term rating of Emaar to BBB-minus, the lowest investment grade, from BB-plus, a confirmation that international investors have regained confidence in Dubai’s property sector as it recovers from its 2008 crash.
“The credit story is catching up with the equity story,” said Sanyalaksna Manibhandu, senior analyst at NBAD Securities.
Manibhandu said the credit rating would help Emaar secure financing at a cheaper price than before, aiding its profit.
“Equity analysts will be more willing to rerate Emaar, but we already knew the company manages its finances well – by making sure that it has enough financing before they launch their projects,” he added. NBAD Securities has a price target of 9.65 dirhams for the stock.
Dubai’s benchmark rose 1.5% to 3,931 points, up for a third consecutive session to hit a new five-year high. On Wednesday it confirmed a break above technical resistance at 3,807 points, the 50% retracement of its fall from the 2008 peak.
In Egypt, Cairo’s benchmark climbed 1.1% but closed just below Sunday’s 45-month high after a Kuwaiti newspaper quoted Egyptian army chief Field Marshal Abdel Fattah al-Sisi as saying he would run for president.
“Most of the locals are reacting positively to the Kuwaiti report despite the announcement not being official,” said Mohamed Radwan, director of international sales at Pharos Securities.
“Investors believe that all the hype around Sisi is more or less leading the way for an official announcement to come next week.” Many Egyptian investors view Sisi as the best chance for political and economic stability.
Shares in Qatar National Bank Al Ahly, the Egyptian unit of the big Qatari bank, gained 4.3% after the lender proposed a capital increase through bonus shares.
Elsewhere, Saudi Arabia’s index advanced 0.3%, trailing most regional bourses for a second session.
Institutional investors say the market has had a good run so far in 2014, but there are few attractive opportunities to lure buyers. The Saudi index is up 3.3% year-to-date after rising 25.5% in 2013.
Dubai: The index rose 1.5% to 3,931 points.
Abu Dhabi: The index gained 0.7% to 4,722 points.
Saudi Arabia: The index climbed 0.3% to 8,819 points.
Egypt: The index rose 1.1% to 7,426 points.
Qatar: The index gained 0.5% to 11,192 points.
Oman: The index edged up 0.2% to 7,107 points.
Kuwait: The index advanced 0.4% to 7,832 points.
Bahrain: The index gained 0.3% to 1,304 points.