Dubai: UAE shares rise in early trading as bargain hunters step in to buy from record lows, with a steady oil price supporting sentiment.
Dubai's Drake & Scull rises 6.8 per cent, up from a record-low hit on Monday after reporting a third-quarter profit slump.
Contractor Arabtec is flat, but along with DSI, they account for almost half the traded volumes on the bourse so far.
Arabtec on Monday said it had submitted a proposal to Egypt's government to construct 13,000 homes in the North African country.
"Both Drake and Scull and Arabtec reported very bad results which dragged the stocks down and triggered margin calls," said a Dubai-based trader.
"Now it's oversold and I think it will rebound from here and then stabilize." The benchmark rises 1.34 percent to 3,217 points, trimming year-to-date losses to 14.7 percent.
Most Gulf markets are somewhat in line with the MSCI emerging market index, which is down 14.1 percent year-to-date, as a slump in oil prices and worries of global growth sparked selling.
Abu Dhabi's benchmark is up 1.0 percent to 4,179 points and Muscat trades flat. These two markets are faring slightly better with year-to-date losses of near 8 percent.
"There are some opportunities, with stocks under-performing and quality names are doing much better than others," said Ali Adou, portfolio manager at Abu Dhabi's investment firm TNI.
Adou said UAE markets should be differentiated from other Gulf bourses because of lesser dependency on oil and a bigger push on economic diversification.
The UAE cabinet in October approved a slightly smaller budget for 2016, but curbed spending.
Meanwhile, the International Monetary Fund estimated Saudi Arabia's shortfall in the public accounts of the world's biggest oil exporter is now running at over $100 billion annually.
Brent crude is trading near-flat at 44.52 dollars per barrel at 0743 GMT.
In Kuwait, shares in Burgan Bank are up 1.3 percent after the lender offered to buy back a $400 million bond originally due to mature in 2020.
Saudi Arabian bank shares could attract buyers on Tuesday after a report on Maaal financial website said the government is in talks with local banks to sell local currency bonds worth 20 billion riyals ($5.3 billion), which will be allocated next week.
This would be the second time this year the Saudi government sold debt to local banks.
