Dubai’s benchmark stock index rose to the highest level in more than a week as Emaar Properties PJSC (EMAAR) said it received offers for nine times the $500 million of Islamic bonds it sold. Egyptian stocks declined.
Emaar, the developer of the world’s tallest skyscraper in Dubai, advanced to the highest since May 2. Emirates NBD PJSC (EMIRATES), the biggest bank in the United Arab Emirates by assets, climbed the most in more than two weeks. The DFM General Index rose 0.8 percent to 1,502.54, the highest since July 5, at the close in the emirate. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six-nation Gulf Cooperation Council fell 0.4 percent.
Emaar, which has the heaviest weighting on Dubai’s index, sold sukuk last week at a profit rate of 6.4 percent, lower than last year’s 8.5 percent. The company’s second-quarter profit will more than double to 551 million dirhams ($150 million), according to the mean estimate of four analysts on Bloomberg. Emaar is scheduled to release financial results later this month.
Emaar’s cost of funding through the sukuk “is positively received by the market,” said Talal Touqan, head of research at Al Ramz Securities LLC in Abu Dhabi. The bonds “are extra liquidity to fuel expansion. On the other hand, people have started to notice that foreign trades, non-GCC, non-Arabs, are targeting Emaar. Those are classified as smart money.”
Investors from the Middle East bought 48 percent of the sukuk, while 38 percent of investors were from Europe, 13 percent from Asia and 1 percent from the U.S., Emaar said in a statement to the Dubai bourse today. Fund managers accounted for 47 percent of the investors, banks 40 percent, private banks 7 percent and others 6 percent.
Emaar increased 1.6 percent to 3.15 dirhams. The shares have climbed 23 percent this year, more than double the gain in the DFM General Index. (DFMGI) The stock was the most traded in Dubai today, according to data compiled by Bloomberg. Emirates NBD climbed 2.7 percent, the most since June 26, to 2.7 dirhams.
Abu Dhabi’s ADX General Index fell 0.2 percent and Kuwait’s gauge lost 0.1 percent, while Saudi Arabia’s Tadawul All Share Index retreated 0.6 percent. Bahrain’s measure slid 0.1 percent and Qatar’s QE Index was little changed, while Oman’s MSM30 Index advanced 0.4 percent.
Egypt’s benchmark EGX 30 Index tumbled 2 percent, the most since July 9, to 4,719.01 at the close in Cairo as President Mohamed Mursi has yet to name a new government three weeks after he won last month’s presidential elections.
Citadel Capital SAE (CCAP), a Cairo-based private equity firm, declined 5 percent to 2.86 Egyptian pounds. Orascom Telecom Media (OTMT) & Technology Holding SAE, a mobile-phone operator headed by Egyptian billionaire Naguib Sawiris, tumbled 3.3 percent to 1.48 pounds.
“We’re still dealing with political instability and a delay in the formation of the government,” said Tamer Nigm, head of sales trading at Cairo-based Watheeqa Securities. The decline “shows the market’s gain after the presidential election was overly optimistic,” he said.
The index has gained 13 percent since Mursi, an Islamist leader, was declared winner on June 24.
Israeli benchmark TA-25 Index dropped 0.8 percent. The yield on the 5.5 percent Mimshal Shiklit notes due 2022 retreated two basis points, or 0.02 percentage point, to 4.13 percent, the lowest since the notes were issued last year.
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