Abu Dhabi’s benchmark stock index advanced for the fourth time in five days after profit at the emirate’s largest real estate developers rose on higher home deliveries in the United Arab Emirates capital.
Aldar Properties gained the most in more than six weeks after the Abu Dhabi developer bailed out by the government last year said first-quarter profit more than doubled. Sorouh Real Estate, the second-biggest developer in the emirate, gained 1.8 per cent after net income rose 30 per cent.
Abu Dhabi’s ADX General Index climbed 0.2 percent to 2,512.17 at the 2 pm close in the emirate. The Bloomberg GCC 200 Index slipped 0.2 per cent at 1:21 pm in Riyadh.
“Real estate developers reported strong results in Abu Dhabi and Dubai,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “The results highlight strong revenues from deliveries, land sales and investment portfolio. This is a sign that the market is bottoming or near bottom.” Aldar, which is building thousands of homes and offices in Abu Dhabi, received Dhs36 billion ($9.8 billion) in government support in 2011 after the emirate’s property market slumped. The company and Sorouh are exploring a merger with the support of Abu Dhabi’s government, which owns stakes in both.
Property prices in the UAE capital slumped 50 per cent after the global credit crisis caused banks to tighten lending and speculative buyers fled the market.
Aldar shares rose 4.4 per cent, the biggest gain since March 14, to Dhs1.18. Net income climbed to Dhs478.2 million from 189.1 million dirhams as the company delivered more residential units and boosted revenue from land sales. Sorouh increased to 1.15 dirhams in the highest close since April 15. Net income gained to 83.6 million dirhams from 64.3 million dirhams a year earlier as home deliveries increased, beating estimates.
In Dubai, Emaar Properties , developer of the world’s tallest skyscraper, increased 0.3 per cent to Dhs3.26 after quarterly net income rose 44 percent, also beating analysts’ estimates.
Oil for June delivery gained 1.8 percent last week to $104.93 in New York after the biggest increase in US consumer spending in more than a year and better-than-projected earnings overshadowed lower-than-forecast economic growth. Gulf Arab oil exporters, including Saudi Arabia and the UAE, supply about a fifth of the world’s oil.
In North Africa, Egypt’s EGX 30 Index decreased 0.5 per cent. Saudi Arabia postponed sending a delegation to Cairo to negotiate lending Egypt $2.7 billion, Al Masry Al Youm reported, citing an unidentified government official.