Gulf News - 29/5/2006

UAE stock markets edged higher yesterday with the Emirates Security Market's Index advancing by 1.22 per cent. This was on the back of a 1.66 per cent advance for Dubai's benchmark index, which closed at 484.44 points, while Abu Dhabi's index advanced by 0.83 per cent to close at 3,453.04.

Emaar's and Amlak's shares gained 1.61 per cent and 1.74 per cent respectively, typically dominating trading as both shares accounted for 83 per cent of Dubai's total market turnover of Dh1.3 billion.

Abu Dhabi Islamic Bank (ADIB) continued to record substantial gains, and it advanced by 8.07 per cent to close at Dh56.90.

Commenting on the bank's share performance, Ziad Al Dabbas, a financial expert at the National Bank of Abu Dhabi said,"There was a purchase of 10 million shares by a strategic investor which ignited this rally a while ago, as it attracted the market's attention, in addition to rumours that the bank is planning a stock split as it is the only share maintaining a Dh10 value."

Al Dabbas added that "this is the only Islamic bank listed in Abu Dhabi, which provides for yet another attractive point. However, there are no fundamentals that justify such rally, as it maintains a relatively high price to earnings ratio compared to other banks, which indicates that mostly speculators are running the show."

In general, the markets are maintaining stability, with the eyes of the investors fixed on any company announcement for a share buyback.

"Institutional investors are not buying heavily in the market; speculators are still holding ground. However, leverage is getting much less, which is a very healthy sign," Al Dabbas said.