Dubai stocks climb on rosy outlook for property companies
SHARES in Dubai rose on bets that real estate companies will post strong second-quarter profits as Dubai's economy expands. Abu Dhabi's main index also gained.
The DFM General Index climbed 0.7 per cent to 4,604.93 yesterday morning, heading for the highest close since June 15.
Arabtec Holding, the United Arab Emirates' biggest listed builder, rallied 1.2 per cent. Deyaar Development PJSC added 0.9 per cent. Abu Dhabi's ADX General Index added 0.3 per cent to 4,860.81.
Dubai-based property and construction companies are benefiting from a real estate-led economic recovery in the emirate.
Emaar Properties PJSC, the company with the biggest weighting on Dubai's index, may report a second-quarter profit of 936 million dirhams (S$316 million) at the end of the month, according to the estimate of two analysts surveyed by Bloomberg, an increase of 39 per cent on the same period last year. Emaar's shares advanced 0.4 per cent to 9.68 dirhams.
"We are expecting decent second-quarter earnings growth for the property and construction sector in Dubai," Nayal Khan, head of institutional sales and trading at the Naeem Holding brokerage in Dubai, said by phone. "This is reflective of the ongoing recovery and the underlying fundamentals of the economy."
Dubai's economy may grow 4.7 per cent this year, Mohamed Lahouel, chief economist for the Dubai Department of Economic Development, said in March.
The emirates' gross domestic product expanded 4.6 per cent last year, government data shows. Property and construction companies are the main beneficiaries of about US$8 billion (S$10 billion) of infrastructure spending planned as Dubai prepares to host World Expo 2020.