UAE’s real estate and construction stocks rally on new visa rules
Shares in the UAE’s real estate and construction companies trade higher today on DFM and ADX, boosted by the UAE cabinet’s move to extend visa for real estate investors from six months to three years.
Shares in ADX-listed Arkaan Building Materials Company were up the most at lunch UAE time, rising 4.88 per cent followed by RAK Ceramic Company (up 4.4 per cent), while by RAK Properties was up 2.86 per cent. The most active ALDAR and Sorouh also advanced modestly. ALDAR stocks are right now extremely undervalued and therefore a great buying opportunity for long term portfolio holders. Sorouh shares are holding slightly better, briefly reaching last month 1.48, before declining again near 1.20. Positive development in the company’s strategy is the implementation of Rent-to-Own option for real estate investors in Abu Dhabi.
In Dubai, shares in Arabtec were up 2.4 per cent while regional benchmark Emaar Properties was up 1.69 per cent as analysts said the move stood to boost the prospects of the stagnating property sector in the country.
The timing of the move is being hailed by many as it comes just as there are signs of a natural pick-up in real estate prices, with the quarterly survey conducted by global property consultancy Knight Frank showing that house prices in Dubai are up 2.1 per cent in the six months ended March 31, 2011.
Experts have been suggesting a longer visa tenure for property investors as a catalyst to revive the real estate market, which is also expected to once again boost the fortunes of the banking sector.
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