MIDEAST MORNING BRIEFING: Gulf Mkts Seen Mixed; Arabtec 2Q in Focus

Wednesday, Aug 08, 2012


 

Saudi SE             6961.34                +0.25% 

Dubai FM             1556.79                -0.15% 

Abu Dhabi SM         2510.87                +0.24% 

Kuwait SE            5708.57                -0.41% 

Doha SM              8365.28                +0.24% 

Muscat SM            5433.65                -0.01% 

Bahrain SE           1090.54                 0.00% 

Cairo SE             5049.51                +0.55% 

Amman                1875.24                +0.41% 

 

ICE Brent $/bbl       111.61                -0.35% 

Gold $/troy oz       1613.40                +0.04% 

Euro-USD                1.23                -0.04% 

DJIA                13168.60                +0.39% 

 

   By Brinda Darasha 

   Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Persian Gulf markets are likely to trade mixed Wednesday tracking global equities for the most part, although investors will keep an eye on the few big name regional companies that are expected to report their second quarter earnings this week.

Dubai's Arabtec Holding, one of the biggest construction firms in the region, reported a second-quarter net loss of AED11.6 million versus a profit of AED29 million a year earlier, missing most analysts expectations.

Abu Dhabi-based fund manager InvestAD said in a note that regional stocks are likely to remain volatile and driven by international markets, because of the eurozone debt crisis and uncertainty over the health of the global economy.

In the global markets, hope for central bank stimulus was kept alive Tuesday after U.S. Federal Reserve Bank of Boston President Eric Rosengren, a non-voting member of the Fed's policy-setting committee, said the Fed should launch a bond buying program to boost the economy until unemployment begins to fall again.

Asian markets were up Wednesday boosted by the call for fresh stimulus and by the overnight gains on Wall Street where the Dow Jones Industrial Average climbed 0.4%, to 13168.60, rising for a third consecutive session.

However, on the European front concerns persist over growth. Data Tuesday showed the Italian economy sank deeper into recession for a fourth consecutive quarter. New manufacturing orders in Germany also fell in June, indicating a slowdown in the region's largest economy.

Nymex crude-oil futures are down early Wednesday after rallying to a 12-week high Tuesday on positive market sentiment and concerns about short-term supply. September Nymex crude was down 30 cents at $93.37/bbl on Globex.

U.A.E.: Dubai's market Tuesday ended -0.2% at 1556.79 weighed by bank and real estate stocks.

Second quarter earnings of GCC banks are giving investors cause for optimism, said fund manager Invest AD. Analyst said that "UAE banks have generally beaten analyst expectations thanks to higher interest income and lower provisioning."

Low-cost carrier Air Arabia said Tuesday its second-quarter net profit rose 31% on year to AED66 million as it flew more passengers and promised further expansion. Its shares closed +0.8% at AED0.651.

Abu Dhabi shares closed +0.2% at 2510.87 Tuesday. Energy stocks supported.

Aldar Properties ended +0.8% at AED1.22; the developer is expected to report earnings later this week. An analyst at The National Investor said that a possible merger between Aldar and Sorouh Real Estate should result in a company that is better equipped to execute the pipeline of Abu Dhabi government projects.

National Bank of Abu Dhabi shares closed +1% at AED8.65 Tuesday. The lender Monday priced a seven-year, $750 million bond to yield 3.043%, after receiving strong demand, a banker aware of the deal said.

Abdul Kadir Hussain, CEO at Mashreq Capital, noted that the pricing for NBAD's bond is a reflection of the liquidity in the markets and the scarcity of deals, particularly from this region.

SAUDI ARABIA: Saudi's Tadawul Index closed Tuesday +0.3% at 6961.34. Banks and petchem stocks lead the gains.

"There seems to be a bit of resistance around the 7000 level, the activity seems to be mostly in smaller companies, like insurance indicating more speculative trading rather than investing," said Alhassan Goussous, CEO for Bakheet investment group.

The kingdom's stock-exchange regulator said Tuesday it has fined Saudi Advanced Industries Co. and Yanbu Cement Co. SAR50,000 each for violating corporate governance regulations.

Saudi Arabian Fertilizer Co. will increase its capital under a one-for-three issue of bonus shares, the stock-market regulator said Tuesday.

KUWAIT: The Kuwait stock exchange ended -0.4% to 5708.57 Tuesday. The market is down -1.8% for the year.

Zain shares fell 1.5% Tuesday to KWD0.660, extending losses from Monday after the telco posted a small increase in second-quarter profit.

QATAR: Qatar's QE Index closed +0.2% at 8365.28 Tuesday.

Qatar Holding is to sign a preliminary agreement with Qatar Insurance Co. to increase its stake in the insurer. Shares closed +2.7% at QAR71.90.

BAHRAIN: The main gauge of stocks closed Tuesday flat at 1090.54.

OMAN: Muscat's market closed flat at 5433.65 Tuesday.

EGYPT: The Egyptian index of shares EGX 30 closed +0.6% at 5049.51 Tuesday.

Investors will keep a close watch on how politics play out in coming weeks, and how talks with international donors develop, while second-quarter results should point to a gradual improvement in the business environment, said the U.A.E.-based fund manager Invest AD.

At a stock level Tuesday, Orascom Telecom rose 3.5% to EGP3.56.

Egypt's international reserves fell to $14.42 billion at the end of July from $15.53 billion in June, reversing gains made in the foreign exchange balance over the last two months, central bank figures showed Tuesday.

Analyst says given this, the Central Bank of Egypt's policy to defend the pound is looking increasingly difficult to sustain. "We still think that the pound is likely to fall in an orderly way by around 20% within the next twelve months. But today's data show that there is still a high risk of a disorderly devaluation," Said Hirsh at London-based Capital Economics said in a client note Tuesday.

NEWS FROM AROUND THE GULF: Trading volumes on the Dubai Gold and Commodities Exchange, or DGCX, continued to soar in July, pushed by gold and Indian rupee futures, to a record 965,637 contracts valued at $35.8 billion.

Saudi Arabia's non-oil exports fell 7.7% to SAR14.5 billion in June compared with SAR15.7 billion a year earlier, data from the Central Department of Statistics and Information, or CDSI, showed.

-By Brinda Darasha, Dow Jones Newswires; +9714 446-1688; brinda.darasha@dowjones.com; Twitter: @ZDJnews

(END) Dow Jones Newswires

08-08-12 0517GMT