DUBAI, March 22 (Reuters) - Shares in GFH Financial Group rose on Tuesday after the Islamic investment bank said it had agreed to sell a 10 percent stake in Bahraini cement producer Falcon Cement Co.
GFH’s Dubai-listed shares rose 2.3 percent. It has yet to trade in Bahrain, which opens for trading at 0700 GMT.
GFH will sell the Falcon Cement stake to Integrated Capital, the capital markets arm of Abu Dhabi Financial Group. Integrated Capital also expressed interest in underwriting a proposed initial public offer of shares by Falcon on the Bahrain bourse later this year, according to a GFH statement on Tuesday.
Other Dubai stocks made little headway. Rival developers Union Properties and Deyaar rose 1.2 and 1.6 percent respectively, but these are relative minnows compared with market bellwether Emaar Properties, which dropped 1.1 percent.
Air Arabia fell 6.6 percent after the budget carrier went ex-dividend, helping drag Dubai’s index 0.5 percent lower to 3,362 points. That trimmed the benchmark’s gains since mid-January’s two-year low to 28.2 percent.
“The quality names rebounded the most - people have looked carefully at the full-year results and guidance management has provided for 2016 and those that have released something good or great have seen their prices moving higher,” said Sebastien Henin, head of asset management at The National Investor.
Abu Dhabi’s index rose 0.8 percent, although about two thirds of the shares traded were in Eshraq Properties and Ras Al Khaimah Co. For White Cement, two mid- to small-cap companies.
Institutions do not trade such stocks and the lack of activity in large-cap firms usually indicates waning market momentum. Eshraq was up 1.3 percent, while Ras Al Khaimah Co. For White Cement was flat.
“I’m pretty optimistic on the UAE,” said Henin, citing the lifting of sanctions on Iran and Dubai’s hosting of the Expo 2020 event as likely catalysts for the emirates’ economy.
The UAE, particularly Dubai, has historically been a major trading partner and hub for Iran, while the Expo is expected to spur multi-billion dollar infrastructure investments in the host city. (Reporting by Matt Smith; Editing by Andrew Heavens)