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UAE markets recover; earnings, dividends lift Saudi

Dubai, July 6, 2014

Blue-chip banks and property-related stocks, led by Dubai construction firm Arabtec, lifted markets in the UAE on Sunday while earnings reports supported Saudi Arabia's bourse.

Dubai's main index jumped 4.4 per cent as shares in Arabtec surged their daily 15 per cent limit. Among other top gainers were bourse operator Dubai Financial Market and developer Union Properties, up 12.6 and 10.5 per cent respectively.

Emaar Properties, the emirate's largest listed developer, added 2 per cent and Dubai Islamic Bank jumped 3.1 per cent.

Banks and property developers also lifted Abu Dhabi's index , which added 1.7 per cent. First Gulf Bank gained 3.1 per cent, National Bank of Abu Dhabi rose 1.7 per cent and Aldar Properties jumped 5.0 per cent.

UAE markets started recovering this month after Dubai's bourse plunged 22 per cent in June and Abu Dhabi lost 13 per cent, in panic selling triggered by the bursting of a speculative bubble and management turmoil at Arabtec.

At a news conference last week, Arabtec assured investors its projects were on track, including a giant $40 billion deal for residential properties in Egypt. The stock's surge on Sunday was partly due to investors rushing to buy the name before it hit the 15 per cent limit, said Julian Bruce, director of Western institutional equity sales at EFG Hermes in Dubai.

The Dubai government's announcement on Saturday of the launch of a project to build a huge entertainment and hotel district, including the world's largest shopping mall, also lifted sentiment.

The "Mall of the World" project was originally announced 18 months ago, and Saturday's announcement did not give details of timing, cost or financing. But the government's bullish presentation of the plan was taken as a cue to buy stocks.

"It was an excuse to go in and buy real estate sector stocks," said Bruce.

Qatar's bourse, which like the UAE bourses was upgraded to emerging market status by index compiler MSCI at the end of May, edged down 0.4 per cent on Sunday after jumping 7.7 per cent in the first three days of July.

"In Qatar we had seen a very strong technical rebound (last week), but it may have been too strong so we are now seeing some profit-taking," said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.

Saudi Arabia's bourse rose 0.7 per cent. Saudi Basic Industries Corp (SABIC) was the main support, rising 1.1 per cent after proposing a cash dividend for the first half of 2014 of 2.5 riyals per share, up from 2.0 riyals a year ago.

Among other names that helped lift the index was dairy firm Almarai which reported an 8.8 per cent increase in second-quarter net profit on Sunday. The firm made a quarterly profit of 433.3 million riyals ($115.5 million), in line with analysts' average forecast of 430.4 million riyals.

Shares in Almarai rose 1.3 per cent, while Saudi Hollandi Bank rose 2.3 per cent after posting a 28.1 per cent increase in second-quarter net profit. At 480.3 million riyals, its profit was 6.9 per cent above analysts' average forecast.

Egypt's bourse rose 0.8 per cent after the Cairo government sharply cut fuel subsidies, reducing the burden on stretched state finances.

Although the move, which has raised gas gas prices by 30-75 per cent, may crimp some companies' profits, it is generally seen by investors as proof that newly elected president Abdel Fattah el-Sisi is willing to carry out unpopular but necessary reforms.

Kuwait's bourse slipped 0.3 per cent after opposition supporters called for a fresh public protest later on Sunday; police dispersed demonstrators at a rally last Thursday and said they had thrown stones, burned car tyres and blocked roads.

Investors say political tensions have been one of the reasons that Kuwait's market has underperformed the region this year.

In Oman, Galfar Engineering rose 1.2 per cent after winning a $105 million road building contract in the country. The deal showed the company can still win state contracts after former executives were jailed earlier this year for corruption.-Reuters




Tags: Dubai | Arabtec | Ramadan | Gulf stocks |

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