Dubai hits 40 month high, most markets up ahead of Q1

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Dubai’s measure hit a 40-month high on Tuesday as investors betting on upbeat first-quarter earnings extended a buying spree, while Saudi Arabia’s bourse also rose, breaking strong technical resistance.

Dubai’s market climbed 2.4 percent to its highest close since November 2009 and is up 21 percent year-to-date.

The benchmark also eclipsed its previous 2013 year high set in late February. Investors usually cash in gains after qualifying for dividend payments and the market did retreat in March, but this year'’s April surge has buoyed traders.

“This year, the trend is different because other than the sentiment and liquidity improvement, shareholders have decided to put most of the dividends back into the market, which has helped the move,” said Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services. “People are looking at next year’s dividends.”

Yasin predicted the market will make further gains in the second quarter.

Emaar Properties rose 2.1 percent and Dubai Islamic Bank gained 6.7 percent.

Shares in contractor Drake and Scull jumped 7.5 percent in heavy trade as investors bet the firm could be an acquisition target, traders said.

Abu Dhabi’s benchmark added 0.6 percent to reach its highest close since October 2009.

In Saudi Arabia, the measure climbed 0.4 percent to an 11-month high. The index broke strong resistance levels as banks supported gains.

Saudi Investment Bank rose 4.9 percent. The lender on Sunday posted a 48 percent rise in quarterly profit.

SABB added 1.5 percent. After market hours, the bank posted an estimate-beating first-quarter profit of 948million Saudi riyals ($252.79 million).

National Medical Care and contractor Abdullah Alkhodari each rallied 10 percent.

“There is an overall positive sentiment on the market on earnings - there is some speculation on stocks ahead of corporate earnings, which is driving up stocks,” said Mohammad Omran, a Riyadh-based financial analyst.

In Egypt, the benchmark climbed 0.9 percent, up for a fourth session since April 3’s four-month low as local bargain hunters bought shares while foreigners remained net sellers.

National Societe Generale Bank rose 7.1 percent, Telecom Egypt gained 2 percent and Commercial Bank International added 0.5 percent.

The government is hoping to clinch a $4.8 billion loan deal with the International Monetary Fund in coming weeks as the country’s finances hit critical levels.

“The market was hit too fast and aggressively – we’re seeing a decent breath of air,” said Mohamed Radwan, director of international sales at Pharos Securities. “But unless there bound is backed up by economic reforms or an IMF deal, I think it will fade away soon.”

An official from Egypt’s Ministry of Finance said that the IMF is “unconvinced” by the latest version of the country’s economic reform program and surprised by the extent to which economic conditions in Egypt have worsened, according to unconfirmed news reports in local media.

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