Dubai may gain on Dubai World debt optimism

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Dubai’s bourse may rise after an executive at Dubai World, the conglomerate at the centre of the emirate’s 2009 debt crisis, told Reuters the firm was confident about its ability to make upcoming repayments.

Mohammed al-Shaibani, chief executive of sovereign wealth fund Investment Corp of Dubai, said Dubai World had the means to make its first big repayment, a $4.4 billion loan maturity in May 2015, and expected to pay off more of its debt ahead of schedule.

This would likely be good news for Dubai banks, especially Emirates NBD, which has major exposure. Dubai World creditors are to meet this week and a high-level delegation of Dubai executives and officials will visit London next week for a roadshow with international investors; a positive creditor meeting would help Dubai attract more foreign money.

Dubai’s benchmark has risen 32 percent this year, well ahead of all other Gulf markets, but there is so far no clear technical sign of a negative reversal.

Bourse operator Dubai Financial Market said on Monday that the daily average value of traded stocks this year had jumped 424 percent to 1.79 billion dirhams ($487 million) from 341 million dirhams a year earlier.

By contrast, Egypt’s bourse has dropped 8.0 percent in the last three sessions as investors booked profits; it is unclear when this trend will end.

Oman’s index, which fell 0.8 percent on Monday, may come under further pressure as more stocks go ex-dividend on Tuesday, including Global Financial Investments Holding, Gulf Investment Services Holding and Oman International Development and Investment Co.

The global market outlook is modestly positive as Asian stocks hit four-month highs on Tuesday on strong Chinese data. Brent crude oil prices, however, have eased after Russia withdrew some troops from the Ukrainian border.