| 06 Feb 2009 |
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Abu Dhabi banks rally on government bailout
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Friday, Feb 06, 2009
Gulf News
Dubai: The Abu Dhabi banking sector spearheaded a rally yesterday after the government's decision to inject Dh16 billion into five banks to improve the liquidity situation.
National Bank of Abu Dhabi (NBAD)National Bank of Abu Dhabi (NBAD)
, Abu Dhabi Commercial Bank (ADCB)Abu Dhabi Commercial Bank (ADCB), First Gulf Bank (FGB)First Gulf Bank (FGB), Abu Dhabi Islamic Bank (ADIB)Abu Dhabi Islamic Bank (ADIB), and Union National Bank (UNB)Union National Bank (UNB) all saw an injection of over Dh2 billion each, leading to gains for all stocks.
NBADNBAD
advanced 9.80 per cent at Dh8.07, ADCBADCB surged 10 per cent at Dh1.54, FGBFGB was up 9.80 at Dh8.40, UNBUNB saw gains of 9.41 to Dh1.86, with ADIBADIB saw the least gain from the five banks of 7.62 per cent to close at Dh2.40. "All Abu Dhabi banks were up 10 per cent. The impact from the government [intervention] was positive and it might stimulate banks' performance in upcoming period," said Hesham Bakry, institutional sales manager, Al Futtaim HC, brokerage firm.
The Abu Dhabi Securities Exchange (ADSE) index bounced up by 1.74 per cent to close at 2,174.38. "It's unknown whether the cash injections are pro-active or reactive but what it does illustrate is the effective monitoring of the sector by the central bank and its commitment to minimise any systemic shocks that may emerge," said Mathew Wakeman managing director, cash and equity linked trading, EFG-Hermes.
On the flip side, the Dubai Financial Market (DFM) shed 1.71 per cent to close index at 1,433.14.
Many companies posting end of year results below expectations, as well as Moody's report on possible downgrading of five companies, including Emaar and DP World, the fourth largest global port operator, has led to a "negative shadow to the DFM".
The Emirates Securities Market Index increased by 0.54 per cent to close at 2,299.35 points. Accordingly the Market Capitalisation has gained Dh1.75 billion.
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