Emaar's dividend plan and rate cut hope drive Dubai stocks to near-decade high

The Dubai stock market surged to its highest level in almost a decade on Monday, driven by strong performances in the financial and real estate sectors.

The Dubai Financial Market General Index, the benchmark, closed 4.5 per cent higher at 5047.5, the highest in almost 10 years.

Shares of Emaar Properties, Dubai's largest listed developer, rose more than 14 per cent – its highest level in almost 17 years – after the company updated its dividend policy.

On Friday, the company said it planned to declare dividends at 100 per cent of its share capital for 2024, and for the next few years.

“The dividend policy provides a tailored approach to dividend distribution and aligns with market practice. It also aims at enhancing shareholder value while ensuring the financial sustainability and strategic growth of [the company],” Emaar said in a statement on Sunday.

In addition to regular dividends, the company may consider special dividends based on its cash flow, it added.

Emaar reported revenue of Dh23.8 billion ($6.48 billion) in the first nine months of this year – up 30 per cent from the same period a year earlier. The company’s net profit before tax grew 24 per cent to Dh12.4 billion during the same period.

“Looking ahead, Emaar is focusing on market expansion, digital transformation, and innovative projects to drive sustained growth,” said Marc Pussard, head of risk at APM Capital, an Abu Dhabi-based financial services company.

“This strategy, coupled with Dubai's thriving real estate market, positions Emaar optimistically for continued financial strength and long-term value creation,” Mr Pussard told The National.

UAE's financial stocks gained on Monday, ahead of a US Federal Reserve meeting on December 17 and 18.

The Fed is widely expected by analysts to cut interest rates by 25 basis points.

Emirates NBD, Dubai’s largest lender, settled 9.3 per cent higher at Dh21.65, while Dubai Islamic Bank closed up 5.2 per cent at Dh7.13.

First Abu Dhabi Bank, the UAE’s largest bank, ended the day about 1 per cent higher on the Abu Dhabi Securities Exchange (ADX).

“What the Fed will announce about the next meetings will probably matter more than this week’s cut,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“On one hand, [Fed chair] Jerome Powell recognises that the US economy and jobs market remain resilient. On the other hand, Trump’s pro-growth policies and tariffs could boost inflation again,” she said.

“There is nothing that justifies the continuation of regular cuts in 2025.”

The Fed has lowered interest rates by a total of 75 basis points in its previous two meetings, bringing down its target range to 4.50-4.75 per cent.

Gulf monetary policy is closely linked to the Fed, as most currencies in the region, like the dirham, are pegged to the US dollar.