Emirati Stocks Rise as Chinese Stimulus Fuels Optimism
Emirati stocks rose at the start of the trading week, driven by optimism following China’s economic stimulus measures aimed at boosting domestic consumption. The FTSE ADX General Index increased by 0.342% and the DFM General Index by 0.599%. Key developments include Investcorp Capital’s potential acquisition of a German firm and a joint venture between National Central Cooling and Dubai Holding.
Emirati stocks commenced the trading week positively, influenced by encouraging sentiments stemming from recent Chinese economic stimulus initiatives. By the conclusion of Monday’s trading session, the FTSE ADX General Index had increased by 0.342%, while the DFM General Index rose by 0.599%. China’s State Council introduced a “special action plan” aimed at enhancing domestic consumption and economic recovery, featuring measures such as boosting household income and implementing a childcare subsidy program.
The ING report highlighted that the plan encompasses various strategies to improve the consumption environment, particularly through the expansion of the services sector, which includes childcare and elderly care, as well as other essential life services such as catering, domestic services, healthcare, and tourism. Analysts asserted, “If implemented successfully, the plan will help China’s economic transition toward a consumption-driven growth model.” They cautioned that while trade-in policies may promote immediate consumption, it could also lead to an inconsistent recovery.
In the UAE, Investcorp Capital is currently negotiating to acquire a majority stake in Miebach Logistik Holding, a transaction potentially valued at 150 million euros, according to Bloomberg News sources. Despite this news, Investcorp Capital shares experienced a decline of 1.714%. Furthermore, Rapco Investment reported stagnant stock performance, despite an increase in profit and investment income for 2024.
Additionally, National Central Cooling, also known as Tabreed, and Dubai Holding Investments reached an agreement to establish a joint venture providing district cooling services to Palm Jebel Ali in Dubai, with respective stakes of 51% and 49%. Following this announcement, the district cooling company saw an increase of 0.755%.
The rise in Emirati stocks can be attributed to positive investor sentiment stemming from Chinese economic stimulus measures aimed at boosting domestic consumption. While local companies like Investcorp Capital and Tabreed are actively pursuing expansion opportunities, the market remains cautious due to potential irregular recovery patterns influenced by these initiatives. Overall, the developments in both the UAE and China suggest a focus on fostering economic growth through strategic collaborations and investments.
Original Source: www.tradingview.com
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