Dubai: Dubai-listed budget carrier Air Arabia surged to a near five-year high yesterday, leading a rally on the emirate’s bourse ahead of UAE second-quarter earnings.
Air Arabia jumped 8.3 percent to reach its highest level since October 2008 and was also the biggest gainer and top trader on the market.
“Air Arabia has been our favourite pick since the beginning of the year because it’s a defensive stock that also has a high growth story,” said Marwan Shurrab, fund manager and head of trading at Vision Investments.
Air Arabia has a 12-month forecast of a 6.4 percent yield, which compares with 4.7 percent for a selection of regional stocks, according to Reuters data.
The company has already paid its annual dividend for 2012, which may indicate many recent buyers are long-term investors.
Goldman Sachs last week gave the stock a ‘buy’ rating.
Dubai’s index rose 2 percent to 2,495 points, resuming a rally but failing to break the 2,501-level chart resistance - the four-and-half-year intraday peak hit on June 3. Abu Dhabi’s benchmark climbed 0.3 percent to hit a new 57-month high, its ninth consecutive gain. In Saudi Arabia, petrochemical shares fell for a third session. Saudi Basic Industries Corp (SABIC), the Gulf’s largest listed company, slipped 0.5 percent.
In Qatar, the index climbed 0.4 percent to a five-week peak.
Qatar National Bank rose 1.8 percent to new all-time high. The lender last week posted a 24 percent increase in second-quarter profit, beating estimates. QNB is among Doha bluechips expected to draw in additional foreign buyers after index compiler MSCI upgraded Qatar to emerging market status.
Reuters
