DUBAI: Dubai’s shares rose for a third day, reversing losses as MSCI Inc.’s upgrade for the United Arab Emirates outweighed a revision in global growth forecasts that triggered drops in Asia and Europe. Egypt shares also rose.
The benchmark DFM General Index, the world’s third-best performer this year among 94 gauges tracked by Bloomberg, gained 0.2 per cent, taking its three-day advance to 2.3 per cent. It fell as much as 1.6 per cent earlier.
Abu Dhabi’s measure was little changed after losing as much as 1 per cent, while Egypt’s EGX 30 Index, which tumbled into a bear market yesterday, rose 1.2 per cent amid increased buying this month by foreigners.
“At first people reacted negatively because global markets and Asian markets were down,” Mohab Maher, a senior manager at Mena Corp Financial Services, said by phone. “They still have confidence in the market that there will be cash inflow coming sooner or later following the MSCI’s decision.”
MSCI promoted the UAE and Qatar to emerging-market status after five years of review. Emerging-market stocks fell to the lowest level in 10 months after the World Bank cut its global growth forecast to 2.2 percent from 2.4 per cent and investors weighed the prospects for reduced monetary stimulus.
Air Arabia, the Middle East’s biggest no-frills airline, was the largest advancer in Dubai, increasing 2.7 per cent.
In Egypt, Commercial International Bank Ltd., the country’s biggest publicly traded lender, rose 1.4 percent, helping boost the benchmark EGX 30 along with 22 other stocks as of the 2:30 pm close in Cairo. The index dropped 5.2 per cent yesterday after MSCI said it may review the nation’s emerging-market status if a foreign-currency shortage worsens.
“Yesterday’s drop may have signaled to some investors that the market is oversold,” Hassan Kenawi, equities trader at Cairo-based HC Brokerage, said by phone. “The market’s overall decline remains due to the political tension that is building toward the end of the month, so today’s gain won’t likely be sustained.”