Real estate firms lead UAE bull run

United Arab Emirates shares increased for a third day, led by real estate companies, as investors speculated economic growth in the Gulf region will benefit from higher oil prices.

Emaar Properties, the Middle East's biggest property developer, rose for a second day after HSBC Holdings Plc initiated coverage of the stock with an "overweight" advice. Sorouh Real Estate Co. increased to a record. Air Arabia rose to the highest in almost three weeks after launching a new route.

"Gulf economies arepredicted to come overperform emerging markets and oil crossing the $100 has definitely sent a positive psychological signal," Rami Sidani, vice-president at Shuaa Capital PSC, said yesterday.

Shuaa manages the equivalent of $1.2 billion. "Coverage on stocks such as Emaar helped support the market after the share was given a fair value at double its current price."

The Dubai Financial Market General Index gained 0.5 per cent to 5,893.90, bringing its three-day growth to 3.3 per cent. The Abu Dhabi Securities Market Index climbed 1.1 per cent, while Oman's Muscat Securities Market 30 Index rose 1.2 per cent.

The UAE's economy will grow at 7.2 per cent, while Oman's economy will expand at 5.5 per cent in 2008, according to the median estimates of seven economists polled by Bloomberg in December. That draws an analogy with Brazil economic growth of 4.5 per cent this year, according to a Bloomberg survey.