DUBAI: Dubai’s shares gained on Thursday after the emirate won the right to host the World Expo in 2020, although the surge of more than four per cent in early trading was short-lived.
At close, Dubai Financial Market General Index advanced 1.63 per cent to 2945.91, on the hopes that the win may drive real estate and construction stocks higher and boost the economy.
The emirate has recovered strongly in the past one and-a-half years from the global financial crisis and today’s gain in Dubai’s shares is an endorsement of the policies that should see the emirate and the UAE strengthen their economy further in the years ahead.
“This is an indication of some of the rally was due to the news of the Expo,” said Tariq Qaqish, head of asset management at Al Mal Capital. “There were those who sold the news, but there were others looking at the market with a long-term perspective.”
Earlier in the month, Dubai shares moved sideways, which in some ways helped in building a better base for the market, which had seen a big jump this year. This was the index’s highest close since October 2008 after a night which saw Dubai beat Russia’s Yekaterinburg 116 to 47 votes. For the year, the benchmark is up 82 per cent, one of the best performing markets in the world.
“The benefit that is going to come as a result of the win will be for Dubai companies,” said Qaqish.
Dubai Investments, expected to play a bigger role in the run up to the Expo, was the most active stock and closed 3.48 per cent to Dh2.38. Emaar Properties, in the early part of trading had risen 1.4 per cent but ended the day flat at Dh6.30. Union properties, Drake and Scull International and Arabtec climbed 2.63 per cent, 0.75 per cent and 0.78 per cent respectively.
“The consequence of all of this will see a quantum jump in infrastructure projects, which will have a spiral effect on various sectors which will move in tandem to the Expo 2020 requirements, which augurs well for the financial markets that is likely to see a good year on year growth going forward,” said Krishnan Ramachandran, chief executive of Barjeel Geojit Securities, Dubai. The Abu Dhabi General Index rose 0.33 per cent to 3849.84.