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Abu Dhabi: UAE stocks recorded more than Dh15.8 billion in capital gains on Tuesday on account of strong demand by foreign and local investors.
The Emirates Securities General Index advanced by 2.12 per cent to 5,577.46, accumulating 38.36 per cent of gains since the beginning of the year.
In Dubai, the recovery of Emaar Properties by almost three per cent to Dh12.75 lifted the general index up by 1.96 per cent to 5,459.33. Yet although the leading developer recovered the position of the most traded share in terms of value, accounting for Dh448 million of the market's total of Dh2.7 billion, most analysts agree that the company is no longer setting the course, as was the case last year.
Two reasons
"There are two main reasons behind the market recovery. First was the contention that the UAE will not depart from pegging its currency to the dollar, but rather revalue the dirham by a moderate rate. Second reason was the positive revaluation of the fair prices of several leading shares in the market," said Mohammad Ali Yasin, managing director of Shuaa Securities.
"Some recent international financial reports are forecasting that the euro will not continue to build strength against the dollar, hence the UAE dirham is expected to be relieved from the pressure as we approach 2008," he added.
Shares of Dubai Financial Market (DFM) recovered by more than two per cent to Dh6.58, while Deyaar Development, the newly listed real estate company, advanced by a slower pace of 1.06 per cent to Dh2.85.
Only three of the 25 traded shares ended yesterday's session in the red, with many analysts predicting that the uptrend will continue.
"Most investors have already booked reasonable profits, and are repositioning themselves at this stage to capture the expected gains of the new rally," Yasin said.
In Abu Dhabi, the general index advanced by 2.51 per cent to 4,267.59, as the rally on the real estate sector continued, while the banking sector resumed its strong gains.
There was strong demand from foreign investors as more than Dh2.17 billion worth of shares changed hands.
Institutions like HSBC set a new 12-month fair value for Aldar Properties at Dh20, and Sorouh Real Estate at Dh15, while a recent report by Citigroup estimated the fair price for the National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) at Dh30 each.
"Such positive reports will contribute to the appreciation of the market to new levels in 2008," Yasin predicted.
NBAD shot up by 4.32 per cent to Dh22.95, while FGB advanced by 2.63 per cent to Dh21.50. The recovery of the real estate sector was also obvious with Aldar surging by 7.78 per cent to Dh10.25, and Sorouh advancing by 4.55 per cent to Dh7.12.
etisalat, the largest listed company in terms of market value continued to report strong gains, recovering 1.87 per cent to close at Dh21.75.
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