(MENAFN - Khaleej Times) Dubai's benchmark index rallied to a record 100 per cent year-on-year on Tuesday as upbeat investors pushed real estate and bank stocks higher.
The DFM general index climbed 1.3 per cent to finish at 3,280 points, its highest close since October 2008. With yesterday's upswing, the bourse extended its 2013 gains to 102.2 per cent.
Shares in blue-chip Emaar Properties and Deyaar Development led the rally on Tuesday.
Emaar, the builder of the world's tallest skyscraper, rose to a five-year high as investors bet Dubai-based developers will benefit from economic growth in the emirate.
Emaar, which has the biggest weighting on the Dubai Financial Market General Index, gained three per cent to Dh7.57 at the close of trading, its highest since September 2008. Emaar shares have more than doubled this year.
Deyaar rose 6.5 per cent to Dh0.969, the biggest percentage gainer on the index today and the highest close since 2009. Union Properties, Dubai's smallest-listed property developer, climbed 1.7 per cent to Dh1.17.
Abu Dhabi's index climbed 0.3 per cent to 4,161 points, a fresh five-year closing high. Qatar's QSI advanced 0.4 per cent to finish at 10,498 points, extending 2013 gains to 25.6 percent. Property companies in Dubai are benefiting from an economic recovery and a rebound in construction as Dubai prepares for the World Expo in 2020.
The UAE, the Arab world's second largest economy, is expected to close 2013 with a 4.5 per cent growth. In 2014, the economy is forecast to pick up momentum on the back of a host of positive factors, according to analysts. They expect inflation in the UAE to pick up to around 4.2 per cent in 2014 as the housing component [39 per cent of the inflation basket] better reflects market conditions.
The Expo 2020 win by Dubai and the impending upgrade of the UAE to the coveted emerging market status by MSCI and S&P will add dynamism to the economy that is already on an upward trajectory spurred by three critical sectors: huge non-oil sector investments, the buoyant trade and services sector, and the booming tourism industry.
The Minister of Economy Sultan bin Saeed Al Mansouri said that despite IMF's predictions of weaker global oil prices in 2014, the UAE's economy would surge ahead.
Oil price impact on the economy will be limited as oil accounts for between 30 and 33 per cent of the country's GDP. The UAE has already set into motion a strategy to further reduce the dependence on oil to 10 per cent in future, the minister pointed out. "In keeping with its Vision 2021, which seeks to make the UAE one of the best countries in the world by 2021, the UAE remains committed to its ongoing development and diversification of its economy," said Al Mansouri. A remarkable surge in trade turned the UAE into the largest consumer market in the region after it overtook Saudi Arabia in imports.
Imports of goods and services totalled 273.5 billion in 2012, the highest volume in the Arab world. In exports, the UAE came second, with about 314 billion while it also was ranked second in terms of total trade of goods and services, handling nea