(MENAFN- Khaleej Times) Bulls lifted UAE stock markets to new levels on Wednesday after an upgrade to emerging market status by Morgan Stanley Capital International (MSCI).
Abu Dhabi's ADX index rose 2.7 per cent, the most since December 2009, while the Dubai Financial Market's General Index advanced 1.6 per cent with trading volumes 319 million shares and 505 million respectively. Property giants Aldar and Emaar emerged top performers of the day at both the bourses.
Dubai's Index has surged 48 per cent so far this year and Abu Dhabi market 39 per cent. The upgrade helped the UAE's $153 billion capital markets extend two of the world's top-five equity rallies for 2013.
DFM is amongst the best performing exchanges globally since the beginning of the year and ranks amongst the best performing exchanges while the average daily trading value increased 67 per cent to Dh460 million compared to Dh278.2 million in the corresponding period of 2012.
"The DFM and ADX markets have had an impressive year to date, as growth prospects for corporate earnings improve over previous years. Looking forward earnings are expected to continue to grow overall in 2014 according to market estimates, which should prove beneficial for local equities," Emirates NBD head of Mena Equity Research Irfan Ellam told Khaleej Times.
The New York-based global index developer MSCI said on Wednesday it has decided to reclassify MSCI UAE and MSCI Qatar Indices from Frontier Markets to Emerging Markets. The upgrades have the potential to draw $800 million of new funds into Qatari and UAE shares, according to HSBC. The MSCI Emerging Markets Index tracks more than $7 trillion of equities around the world.
UAE markets would account for 0.4 per cent of the weighting of the Emerging Markets index, with Qatar accounting for 0.45 per cent, according to MSCI. Welcoming the move, DFM managing director and chief executive officer Essa Kazim said: "This will further increase the UAE's attractiveness for foreign investments thereby placing our market in the position amongst international markets."
Equity analysts also welcomed the move and expected a significant inflow of funds from institutional investors for the country. Largest company, banks, and telecommunications sector would be the first to benefit from the upgrade, they added.
"The MSCI upgrade will not directly impact the number of IPOs. However the MSCI upgrade should help boost the flow of fund into the countries, through access to a larger pool of assets, and improve liquidity, which in turn should prove positive for valuations," Ellam explained.
At the DFM, Emaar Properties was among the top three performers. Property giants share price jumped by 2.8 per cent to Dh5.8. Others include Aramex 6.3 per cent to Dh2.4, and DIC 2.6 per cent to Dh1.57. In terms of trading volume, Dubai Financial Market topped with 102 million shares followed by DIC 68.2 million shares, and Union Properties 53.7 million shares.
At the Abu Dhabi market, Aldar emerged top performer with 246 million shares and closed at Dh2.32 followed by Sorouh 153 million shares at Dh2.76.
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