DUBAI: Dubai’s benchmark stock index rose for the first time this week, leading Gulf markets higher, on speculation recent declines are overdone given growth prospects and after Chinese manufacturing quickened more than expected.

Emaar Properties, the developer of the world’s tallest skyscraper in Dubai, increased 0.9 per cent and Emirates Integrated Telecommunications Co. rose 2.9 per cent. The DFM General Index advanced 0.3 per cent, the most since August 29, to 1,487.83.

The Bloomberg GCC 200 Index increased 0.5 per cent. “Day traders look at global market movements as signals to enter or leave the market” and today’s gains are a rebound from recent declines, said Humam Al-Shamaa, economic adviser at Al-Fajer Securities in Abu Dhabi. “The gains are limited as volumes are extremely low.”

A decline of 6.9 per cent over the past six months has left the 32 companies in Dubai’s benchmark index valued at 5.86 times estimated earnings, data compiled by Bloomberg show. That compares with 12.03 times for the MSCI Emerging Markets Index.

The MSCI Asia Pacific Index gained 1.4 per cent after China’s Purchasing Managers’ Index rose to 51.7 in August from 51.2 in July, exceeding the median 51.5 forecast in a Bloomberg survey of 17 economists.

The Standard & Poor’s 500 Index advanced yesterday after gains in home prices and consumer confidence tempered concern the US economy is faltering.

About 33 million shares traded in Dubai so far on Wedensday, compared with a six-month daily average of 153 million.

Emaar advanced for the first time since Aug. 26, to Dhs3.29 and Emirates Integrated, the smaller of two UAE phone companies, climbed to Dhs2.15, the highest since June 27.

Tadawul advances

Qatar’s gauge increased 0.3 per cent and Saudi Arabia’s Tadawul All Share Index advanced 0.4 per cent.

Bahrain’s measure rose 0.2 per cent, while the Kuwait Stock Exchange Index lost 0.3 per cent.

Abu Dhabi’s ADX General Index slipped 0.1 per cent and Oman’s MSM30 Index was little changed.

Saudi banks also gained. Samba Financial Group and Al-Rajhi Bank added 1.2 and 0.7 per cent respectively. Saudi’s index rose 0.9 per cent.

“Banks are up because they have low exposure to international markets,” said Onazi.

“There is usually a rally after Ramadan, so maybe some people are taking speculative positions now ... we are into a fourth month of trading between 6,000 and 6,300 points and volumes are setting new lows.”

These conditions make an imminent rally unlikely, Onazi said, but Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi, was more bullish, forecasting Middle East markets would outperform their global peers from now until year-end.

“We could soon see a flow of funds from international investors coming into MENA markets, so now is a good time to start building positions,” said Haddad.

He predicted foreign investors would rotate cash into underperforming Middle East markets as world and emerging equities stumble.

“It’s cyclical as international investors move money from one region to another,” said Haddad.

“We’ve traded sideways for a long time on low volumes, but a shift is slowly happening and should be accelerated after Ramadan.”

Agencies