A Kuwait based operator was unusually the top traded stock in Dubai today as local equities were boosted by foreign buying.
Hits Telecom had 24.6 million shares change hands, boosting the price by 4.3 per cent to 89 fils. The company has a dual listing on the Kuwait Stock Exchange and the Dubai Financial Market.
"It's mainly due to arbitrage opportunities on the shares at the moment, by going long in Kuwait and selling positions in Dubai and vice versa," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai. "Arbitrage trading is usually done by the big shareholders in the company themselves by shifting their allocations to benefit from the volatility," he added.
Local equities on the Dubai bourse advanced, triggered by foreign buying and net selling from retail investors.
Tamweel, the Islamic mortgage financing company, was up 2.9 per cent to 85 fils. Emaar Properties was up 1.6 per cent to Dh3.15. The Dubai Financial Market General Index was rose 0.4 per cent to 1570.30 points.
"The recent activity has been mostly been driven by retail investors closing positions with foreigners being net buyers at these levels," said Anastasios Dalgiannakis, a trader at Mubasher Financial Services in Dubai.
"Much of the focus has been on Dubai government's takeover of Dubai Bank announced yesterday and how it would impact Emaar," Shurrab said. "It remains uncertain if there is a value for the take over or not," he added.
On the Abu Dhabi Securities Exchange, Aldar Properties rose 1.4 per cent to Dh1.44. Sorouh Real Estate was up 1.5 per cent to Dh1.35. The Abu Dhabi Securities Exchange General Index added 0.3 per cent to 2650.88 points.
Elsewhere in the region, Kuwait's index rose 0.4 per cent to 6495.60. Bahrain's index was unchanged at 1377.89. Oman's measure lost 0.2 per cent to 6120.75. Qatar's benchmark lost 0.6 per cent to 8626.02. The Saudi Tadawul All-Share Index added 0.2 per cent to 6649.76.