Stock News: Dubai Rebounds As Emaar Soars

Dubai’s stock index rebounds into positive territory as investors buy beaten-down property-related stocks, after the market earlier plunged as much as 5.4 per cent.

The index recovers to stand 1.1 per cent higher at 3,987 points, bouncing back above the 200-day average at 3,866 points, which is seen as an important technical indicator.

Blue chip Emaar Properties jumps 7.3 per cent while construction firm Arabtec, which earlier fell its 10 per cent daily limit, is up 8.8 per cent.

Dubai’s rebound was triggered in part by a recovery in Qatar, where investors also came in to buy earlier in the morning on the grounds that some valuations had dropped to attractive levels.

However, uncertainty over Arabtec’s business strategy and relationship with major shareholder Aabar remains, while the Dubai market’s descent in the past month has been so fast that many investors may have been unable to get out of stocks. So fund managers say it is not clear that any extended rebound of the market is beginning.

Qatar’s bourse declined almost non-stop last month after hitting an all-time high at the end of May thanks to its inclusion in MSCI’s emerging market index, together with Dubai and Abu Dhabi.

All three markets then saw heavy profit-taking, made worse by concern about the security critis in Iraq and retail investors exiting the market ahead of Ramadan.

“After the declines in Dubai and Qatar there are a lot of names that look remarkably attractive from the valuation perspective,” says Amer Khan, senior executive at Shuaa Asset Management in Dubai.