Powerhouse banking shares drive market cap gains of Dhs61 billion - GulfToday

Powerhouse banking shares drive market cap gains of Dhs61 billion

Banking Shares-750x450

Shoppers leave a supermarket in Leeds, Britain, on Wednesday. AFP

Driven by country-level economic incentives and stimulus packages, the UAE financial markets continued their rebound for the second straight day, with listed companies posting combined gains of Dhs61 billion in market cap in the two sessions of Tuesday and Wednesday.Abu Dhabi’s main stocks index was up 7.23 per cent to 3,915 points on Wednesday, driven by gains at some of the blue chips, specially powerhouse banking stocks, with DFM’s General Index following suit, and closing 6.42 per cent high at 1,823.

In Abu Dhabi, Etisalat was the best performer, climbing to Dhs14, with FAB closing high at Dhs10.30, followed by ADCB, Dhs5.65, and Aldar Properties at Dhs1.7.

In Dubai Financial Market, Dubai Islamic Bank edged up to Dhs3.92, with Emaar picking up to Dhs2.32 and Emirates NBD to Dhs7.38.

Over the past three years, the UAE’s banking sector has expanded, and now it provides 98 per cent of its services to customers electronically, enabling them to achieve their transactions safely online.

Studies performed by the Federal Competitiveness and Statistics Authority, FCSA, highlighted an increase in the number of users of digital banking services to 90 per cent, which reflects the high demand for this type of banking service.

In light of the significant development witnessed by e-transactions in this sector, banking services provided through the internet are not limited to deposits, withdrawals, transfers of money and other related services, with some digital banks having no branches.

A previous study by McKinsey showed that people in the UAE are willing to open online bank accounts, as 48 per cent of the population supports this option.

This trend is in line with the plans of the government to digitally transform all services provided by the public and private sectors.

According to the Global Knowledge Index 2019 prepared by the Mohammed Bin Rashid Al Maktoum Foundation for Knowledge, in partnership with the Regional Bureau for Arab States and the United Nations Development Programme, the UAE occupies advanced global positions in indicators of global competitiveness in the communications and information technology sector.

A total of 9,429 deals were conducted worth Dhs566 million over 466 million shares.

Opening trade in New York maintained the rally by global stocks Wednesday, as US lawmakers prepared to vote on a mammoth stimulus package to help the world’s biggest economy resist effects of the COVID-19 pandemic. The Dow Jones index was up by 2.6 per cent in early trading, helping pull most European markets along with it.

Frankfurt was the outlier, shedding 0.4 per cent in afternoon trading. Meanwhile, the dollar gained ground against other major currencies, while oil prices slipped lower.

“The stimulus is now by and large in place,” said Neil Wilson, chief market analyst at trading group Markets.com.

“The question is whether it’s enough for the markets.”

“All we can do is stay at home and hope that in six months, life has moved on and all of these stimulus efforts have protected people and businesses, and accelerated the recovery,” Craig Erlam, senior market analyst at OANDA Europe.

While COVID-19 continues to spread, traders gave a rare show of optimism after weeks of huge losses. Their eyes are fixed on Washington, where congressional leaders have thrashed out an emergency bill worth as much as $2 trillion − around 10 per cent of US gross domestic product.

“At last, we have a deal,” Senate Majority Leader Mitch McConnell said, calling it a “wartime level of investment into our nation”.

“We have a bipartisan agreement on the largest rescue package in American history,” top Senate Democrat Chuck Schumer said shortly after McConnell spoke.

The bill was expected to pass the Senate as soon as Wednesday, but it was unclear whether the House of Representatives would be able to pass the proposal unanimously, potentially delaying enactment.

The measure would put cash directly into the hands of Americans, provide grants to small businesses and hundreds of billions of dollars in loans for corporations including embattled airlines, and expand unemployment benefits.

The prospect of such massive spending, combined with a Federal Reserve pledge to essentially print as much cash is needed, sent Wall Street into overdrive on Tuesday, with the Dow seeing its biggest rise since 1933.

The S&P 500 enjoyed its best day in more than a decade.

The gains then spread to Asia, which rallied for a second straight day.

Tokyo ended eight per cent higher, with Japanese investors also relieved that the 2020 Olympics had been postponed rather than cancelled.

Hong Kong rose 3.8 per cent, Shanghai was up more than two per cent, while Singapore, Sydney and Manila rallied more than five per cent and Seoul piled on more than four per cent.

Adding to the more upbeat mood was a G7 promise to do “whatever is necessary”.

WAM/ Agencies

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