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By Celine Aswad
DUBAI, May 9 (Reuters) - Shares of companies that beat quarterly earnings estimates outperformed on Tuesday with electronics and bookstore retailer Jarir helping lift the mood on the Saudi Arabian exchange.
Markets across the region rose modestly in thin trade.
Shares of Jarir
The company's board also recommended distributing 2.2 riyals per share for the period, higher than the 1.75 riyals it paid out in the prior year period.
"This implies an annualised dividend of 8.8 riyals per share and yield of 6.6 percent, which is amongst the highest in the sector and offers downside-risk protection to investors," said Riyadh-based NCB Capital.
Jarir's top line rose by 20.3 percent in the period, helped by rising sales of smartphones and sales of goods to schools.
Analysts at Riyadh-based Alrajhi Capital said revenue growth was probably driven by new store openings after Jarir opened a record seven retail stores in the last four quarters. Also Alrajhi Capital said like-for-like sales at existing stores came in better than estimated.
Consumers' spending is expected to improve on the back of the reversal of last year's cut in civil servants' pay packages. That is good news for companies like Jarir, despite its shares trading at a slight premium to other retailers on a forward price-to-earnings ratio.
NCB Capital, for example, rates the stock "overweight" and has a price target of 142.6 riyals. It calculates the stock to be trading at a forward price-to-earnings of 16.3 times earnings compared to peers of 15.0 times.
The positive mood spilled into most other local consumption related shares, with Jarir's competitor United Electronics
Supermarket operator Al Othaim
In Dubai, the index
In neighbouring Abu Dhabi, shares of the largest listed developer Aldar Properties
Qatar's index
EGYPT
Cairo's main index
Real estate developer Talaat Mostafa Group
Although the companies have not yet reported first quarter result, Palm Hills said last month that new sales in the three months to March 31 rose by 58 percent from the prior year period.
Analysts at Naeem Brokerage said they expect sales to remain strong for the entire real estate sector in Egypt, but have warned that margins may drop on rising costs and a slowdown in construction.
"Given the high inflationary environment and reduced purchasing power of locals ... impacts on future demand
HIGHLIGHTS
SAUDI ARABIA
* The index
DUBAI
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ABU DHABI
* The index
QATAR
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EGYPT
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KUWAIT
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BAHRAIN
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OMAN
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($1 = 3.7502 riyals) ($1 = 18.0500 Egyptian pounds) (Editing by Andrew Torchia and Susan Fenton) ((celine.aswad@thomsonreuters.com)(+9715 6224 7653)(Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))