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By Celine Aswad
DUBAI, Aug 3 (Reuters) - Saudi Arabia's supermarket and Abu Dhabi's largest listed developer outperformed otherwise flat regional shares on Thursday because of their strong second-quarter earnings.
Shares of Al Othaim Markets
The company attributed the 43.1 percent increase in net profit from the year before to growth in sales at existing and new branches, improvement in gross margin and increase in rent revenues from new leasable spaces.
Shares of medical equipment and hospital operator Al Hammadi
Analysts at Alrajhi Capital said a merger might help both companies address their specific issues: declining operating profit in the past four quarters for Care and negative cash flow from operations in four of the five past quarters for Hammadi.
Alrjahi said if the combination goes through it would create the kindgom's largest listed healthcare provider.
Since the start of the year shares of both companies have under-perfomed their peers, mainly because of unsettled bills from the government.
Shares of airport ground handling service provider Saudi Ground Services
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In Abu Dhabi, shares of the largest listed developer, Aldar Properties
Although revenue fell by a fifth from the year before, off-plan residential sales in the second quarter showed resilience in demand for mid-income housing, said a note by Arqaam.
Government grants supported earnings growth in the second quarter, according to Arqaam, which has a positive outlook on project delivery.
"We view the momentum in real estate execution positively, in the run up to 2017 completions ... The handovers (2.4 billion dirhams in sales value), if realized this year, would trigger a discretionary dividend payment that is related to profit on residential handovers," said Arqaam Capital.
Arqaam rates the stock a buy with a target price of 3.4 dirhams.
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In Egypt, shares of Global Telecom
"The reported numbers fall short from a profitability standpoint ... we infer positives from the management's tone in terms of outlook for Djezzy (the Alegerian unit) going forward; especially, taking positive note of the $150 million in dividends announced by Djezzy," said a note by Cairo's Naeem Brokerage.
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($1 = 3.7501 riyals)
(Editing by Larry King) ((celine.aswad@thomsonreuters.com)(+971 5 6224 7653)(Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))