DFM stocks lifted over Lausanne news
Stocks in Dubai rose on Sunday, with the benchmark index gaining 1.4 per cent following a preliminary agreement reached between Iran and world powers last week over solutions to move toward a final agreement over the Iranian nuclear energy program.
The gains were led by the real estate developer Damac and Commercial Bank of Dubai.
“There was a sentiment effect of the Iran deal on the UAE, and the markets reacted a bit positively,” said Saleem Khokhar, the head of fund management and head of equities at NBAD Global Asset Management as quoted by UAE’s The National news website. “But we don’t yet know the timing of the lifting of the sanctions among other things.”
Over a week of talks between top diplomats of Iran and the P5+1 in the Swiss city of Lausanne culminated in a joint statement on Thursday in which the sides said they had reached understanding over solutions to move ahead toward drafting a comprehensive nuclear agreement before 30 June.
A key point of Lausanne statement was a promise to lift the economic sanctions on Iran. The prospects for the removal of the sanctions within the next three months have has already boosted business confidence in Iran with the stock market in capital Tehran recording jumps in stock gains on Saturday and Sunday that have been described as the highest in the past 18 months.
Iran has a historic trading relationship with the UAE. In 2013, bilateral trade between Iran and the UAE was around US$32 billion.
While the current developments in Yemen are expected to have a limited economic effect on the UAE, along with the Iran deal it would affect the oil prices. Brent crude was at $54.95 per barrel last week, but is not expected to stabilize before 12 to 18 months, according to Mr Khokhar.
On the Dubai Financial Market, Damac gained 8 per cent following a confirmation that the founder and chief executive Hussain Sajwani had purchased a plot of land in London for a residential project. Damac is set to build a 50-storey mixed-use tower with 450 residential units with office and retail space.
Commercial Bank of Dubai rose 5.69 per cent. Last week it announced the acquisition of a corporate loan portfolio worth Dh3 billion from Royal Bank of Scotland in the UAE.
Drake & Scull International and Dar Al Takaful were among the biggest losers.
In the capital, the Abu Dhabi Securities Exchange General Index rose by a marginal 0.08 per cent, with Foodco Holding shares losing 10 per cent of their value and Arkan Building Ma retreating 9.7 per cent. Their dip was compensated for by Abu Dhabi Ship Building and Dana Gas, which rose 11.1 per cent and 7.3 per cent, respectively.
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