Dubai Stocks Offer Value as Index in Bull Market

18/04/2011 00:00 AST

Templeton Asset Management Ltd.'s Mark Mobius said Dubai banking, property and services shares offer buying opportunities as the emirate's benchmark index enters a bull market, after rebounding more than 20 percent from a six-year low.

The Dubai Financial Market General Index rose 1.6 percent yesterday to close at 1,648.44, bringing the surge from the low on March 3 to 22 percent. That surpassed a 20 percent threshold some investors consider the beginning of a bull market. The gauge, up 0.3 percent at the 2 p.m. close in Dubai, is still 6.9 percent below its year-ago level, leaving it valued at about 0.7 times net assets, or book value, while the MSCI Emerging Markets Index is valued at 2 times net assets.

"It's possible that we are entering another up phase," Mobius, who said he oversees about $54 billion, told a roundtable meeting in Dubai yesterday. "In some ways Dubai and Abu Dhabi could be the beneficiary of what's happening in the rest of the region."

Dubai's benchmark index tumbled as much as 17 percent in the first quarter as uprisings in the Middle East and North Africa ousted leaders in Egypt and Tunisia and reached countries including Bahrain and Oman in the Persian Gulf. Since then, the emirate and neighboring oil-rich Abu Dhabi have emerged as the closest thing to a safe haven in the region. Their benchmark stock measures have also gained on optimism they will secure an upgrade to emerging market status at index provider MSCI Inc. Abu Dhabi's gauge has gained 3.9 percent this month.

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Bloomberg