Dubai shares rise 2.4%, pacing Middle East gains

Middle East shares rose, sending Dubai\'s index up the most in more than three months, after Greece passed a five-year austerity package to avoid default, boosting investor appetite for riskier assets. Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper in Dubai, jumped 3.6% and Emirates NBD, the United Arab Emirates’ biggest bank by assets, gained to the highest in almost two weeks. Dubai’s DFM General Index increased 2.4%, the most since March 20, to 1,553.31 at the 2 p.m. close in the emirate. Abu Dhabi’s ADX General Index climbed 0.2% and the Bloomberg GCC 200 Index added 0.2% at 1:22 p.m. in Riyadh. Israel’s measure surged 2.2%. “The marginal regional investor, providers of incremental liquidity, have for many months now looked at global markets for cues, so the strong global close last week certainly helped,” said Sachin Mohindra, a fund manager at Invest AD in Abu Dhabi. “High net worth regional investors will continue to take cues from global markets in the next few months.” U.S. and European stocks rose last week after Greek Prime Minister George Papandreou on June 29 clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off default for his debt-laden nation. Lawmakers backed a bill on June 30 to authorize the measure. U.S. stocks posted the biggest weekly rally since July 2009. The Standard & Poor’s 500 Index soared 5.6% last week, while the Dow Jones Industrial Average advanced 5.4%. The MSCI Emerging Markets Index rallied 3.7%. “Valuations in key Gulf Cooperation Council stocks look attractive relative to underlying growth and I expect long-term investors to closely track second-quarter results to firm up buying decisions,” Invest AD’s Mohindra said. A decline of 4.7% this year has left the 31 companies on Dubai’s benchmark index valued at about 8.5 times estimated earnings, data compiled by Bloomberg show. That compares with 11.1 times for the MSCI Emerging Markets Index. Emaar rose the most since May 10 to 3.13 dirhams and Emirates NBD increased 2.4% to AED4.25, the highest level since June 20. Tamweel PJSC, the home finance company majority owned by Dubai Islamic Bank, rallied 3.4% to 88 fils. The stock was included in the DFM General Index and the banking sub-index. Qatar’s QE Index advanced 1.4% and Oman’s MSM30 Index added 0.3%. Bahrain’s gauge slipped 0.2 percent, Kuwait’s SE Price Index retreated 0.6 percent. Saudi Arabia’s Tadawul All Share Index dropped 0.3%, following a 1.2 gain yesterday. In North Africa, Egypt’s EGX 30 Index advanced 1.1%.