Markets Update:Dubai's market rises to its highest level since October after a presidential decree gives cheer to bank investors and a string of deals in the real estate sector are announced.
Dubai hits its highest in two months
Dubai's market rallied to its highest level since October today after the emirate's construction companies announced a slew of new deals, while a presidential decree to raise salaries sparked sharp gains at banks.
The Dubai Financial Market General Index rose 1.8 per cent to 1,404.34, while the Abu Dhabi Securities Exchange General Index increased 1.1 per cent to 2,472.95.
Trading activity also staged a recovery, with the value of stocks changing hands on the DFM their highest since October.
Property companies such as Arabtec and Drake & Scull International lifted the Dubai index higher, while a presidential decree increasing the salaries of federal government employees by 35 to 100 per cent sparked a rally among banks, led by First Gulf Bank, National Bank of Abu Dhabi and Abu Dhabi Commercial Bank.
"That's very positive for retail investors," said Rami Sidani, head of Middle East investments at Schroders. Banks including First Gulf Bank would be the "main beneficiaries of new liquidity coming into the system," he said.
A Dh10bn fund to help low-income families struggling to pay their loans, also announced on National Day, would help banks reduce numbers of bad debts, Mr Sidani added.
Emaar Properties rose 5.5 per cent after Bloomberg reported that the developer had raised an $800m Islamic loan.
DSI rose 4.7 per cent to 83.8 fils after the construction company said it had won a Dh200m contract for engineering works at a university in Kuwait, while Arabtec's shares gained 3.4 per cent to Dh1.51 each after its new facilities management subsidiary won a contract to service a property in Dubai Marina.
Elsewhere in the region, Qatar and Oman joined the gains seen on the UAE's markets, while other Gulf bourses were flat.