The stock index in Dubai rallied to a three-year high thanks to Emaar Properties on optimism by investors that a real estate recovery is set to move forward this year in the emirate.
Emaar is the developer of the tallest skyscraper in the world and had its price forecast increased at HSBC Holdings. That helped it surge 5.7%. The DFM General Index, the benchmark in Dubai increased by 2.2% its highest level of three years. Not since November of 2009 has, the index closed at Friday’s figure of 1,899.61.
A senior trader in Dubai said that stability in real estate is enough to for a continued equity rally in Dubai. He said that the majority of stocks in the index are undervalued.
Stocks in Dubai increased 16% in the first month of 2013, their best increase to start a new year since operations started at the exchange in 2000. The property market in the city is recovering since the tourism, restaurant and hotel industries have grown since their crash in 2008 that sent prices on homes tumbling by over 65%. The economy, in Dubai, increased by 5% during 2012, its fastest pace in 5 years.
Emaar surged to its highest close on the index since November of 2008. The recovery in Dubai of the real estate and economy will help increase the company’s stock even more, as sales of apartments pick up amidst an increased demand.
In Saudi Arabia, the Tadawul Share Index was up .2% for its highest close since February 4. The biggest exporter of oil in the world might allow direct investments by foreigners within the next year, said a hedge-fund specialist in San Francisco.