Stock market indexes in Dubai and Abu Dhabi surged on Tuesday after the state’s Purchasing Managers’ Index (PMI) hit 19-month high, indicating expansion of non-oil sector.

stock market
stock market
The ADX General Index in Abu Dhabi, the capital of United Arab Emirates (UAE) , jumped 1.84 percent to 4,548.87, while the market DFM in Dubai rose by 0.58 percent, closing at 3,559.69. Both markets witnessed gains in the financial and property sector.

Earlier in the day, Emirates NBD, UAE’s biggest bank, said in an e-mailed statement that seasonally adjusted Emirates NBD UAE PMI, a composite indicator designed to feel the pulse of operating conditions in the non-oil private sector economy, picked up to a 19-month high of 56.2 in March from 56 in February.

“The latest PMI survey for the UAE points to encouraging growth in the non-oil economy through the first quarter of 2017,” said Tim Fox, head of research and chief economist at Emirates NBD.

Despite the fact that the UAE is a major oil supplier, its relatively high degree of economic diversification, especially in comparison to the neighboring Gulf states, led to a rather small part, only 29 percent, of its gross domestic product to be based on the “black gold” economy.

Fox also mentioned the optimism among local firms about the potential for further improvements in client demand, which was evident in a strong rise in purchasing activity.

Emirates NBD summarized the key findings of the survey as that “expansion in business activity picked up to a 25-month high, while new order growth quickened to the sharpest rate in over 1.5 years.”

However, the bank added that the flip side of the coin was that last month “firms faced increased cost pressures amid a general rise in market prices due to higher demand for raw materials.” Enditem

Source: Xinhua/NewsGhana.com.gh