Dubai Shares Rise Most Since December on State-Guarantee Hopes
Dubai’s benchmark stock index climbed the most in three months, leading gains in Gulf markets, on bets the government will back Dubai World after an official said the government is “always behind” the company.
Shuaa Capital PSC, the biggest investment bank in the United Arab Emirates, and Dubai Financial Market PJSC, the only publicly traded Gulf Arab stock market, jumped the most in three months. Dubai Investments PJSC, the owner of stakes in more than 40 companies, climbed to the highest since January. The Dubai Financial Market General Index advanced 3.7 percent, the most since Dec. 14, to 1,746.6.
The government is “always behind” Dubai World and is separating “the bad business from the good business,” Sheikh Ahmed Bin Saeed al-Maktoum, chairman of Dubai Supreme Fiscal Committee, said in New Delhi on March 12. Some investors are interpreting those comments as a sign that Dubai’s troubles may be subsiding, said Tarek Zohny, a Dubai-based trader at EFG- Hermes Holding SAE.
“One of the messages investors wanted to hear and got last week was that there’s a possibility of a government guarantee,” Zohny said.
Dubai World, which is restructuring $26 billion in debt, will ask banks for permission to delay loan repayments when it presents a plan this month, said three bankers familiar with the negotiations on March 8. The company will present a restructuring proposal to creditors after its advisers finish valuing company assets, a person close to the Dubai government said Feb. 17.
Shuaa Capital soared more than 11 percent to 1.36 dirhams and Dubai Financial Market jumped 9.6 percent to 1.82 dirhams. Both companies were upgraded by HSBC Holdings Plc on March 10. Dubai Investments climbed 3.1 percent to 1 dirham, the highest since January 11.
Abu Dhabi’s ADX General Index gained 1.2 percent. Qatar’s benchmark stock index rose 0.9 percent and the Kuwait Stock Exchange Index increased 0.4 percent. Bahrain’s gauge fell 0.3 percent and Oman’s MSM30 Index dropped 0.1 percent. Saudi Arabia’s Tadawul All Share Index advanced 0.3 percent.