Winds of recovery blow softly in the Emirates

A sharp rebound on world markets gave little succour to UAE stock traders yesterday, although Abu Dhabi government bonds retained their appeal as a haven.

Despite strong increases for European market indexes, yields on five-year Emirati bonds have been trading at record lows as investors seek havens. Bond yields fall when prices rise.

Against a backdrop of surging world stock markets, the UAE's markets staged only a tentative recovery.

The Dubai Financial Market General Index rose 0.1 per cent to 1,448.46 points, only the third day this month that the index has advanced.

The Abu Dhabi Securities Exchange General Index gained 0.4 per cent to 2,543.81.

The FTSE 100 rose 3.3 per cent and France's CAC 40 gained 4.4 per cent in afternoon trading as speculation grew that European governments would take coordinated action to help to resolve the euro zone's debt crisis.

But analysts doubted that a solid recovery was underfoot as poor trading volumes persisted.

Any gains were likely to prove fragile, said Talal Touqan, the head of research at AlRamz Securities. "The chronic weakness basically stems from the record low volumes and sluggish turnover levels."

Dubai International Capital, First Gulf Bank and National Bank of Abu Dhabi led the day's gains on UAE markets. Such was the lack of volume that National Bank of Fujairah became the unlikely star performer,gaining 9.8 per cent to Dh3.81 a share.

Elsewhere in the Gulf, most other markets saw gains, although stocks in Kuwait and Bahrain fell.

ghunter@thenational.ae