Rife
National Bank of Kuwait and Mobile Telecommunications Co (Zain) fell 0.98 percent and 2.02 percent respectively. The services sector was rife with speculations after State-controlled Saudi Telecom Co beat state rivals to win a stake in Kuwait's third mobile phone company, bidding KD 248.7 million, seeking to expand outside its home market. Engineer Saud Al Duweesh, President of Saudi Telecom, who was speaking at a press conference held soon after the results of the tender was announced said as a new player, the company is hopeful of getting about 30 percent of Kuwait's market share. The company will negotiate with the other founders of the third mobile company, which if legally established will begin operations within six months, he added.

Saudi Telecom has vast experience serving 16 million mobile subscribers and 4.5 million fixed line subscribers in Saudi Arabia, covering 98 percent of the population. Sector wise, banking and real estate sectors were the worst losers falling 0.9 percent. The services sector sold the biggest volume of 34.2 million shares, which was 15.7 percent fewer than its previous volume. The investment sector sold the second largest volume of 33 million shares, which was more than double the volume it sold Tuesday. The increase in sale was 110.2 percent.

Meanwhile, news from the bourse website quoted an official from Kuwait's Noor Financial Investment Co as saying the company has agreed to buy 11.6 percent of a holding owned by the Jordanian government in Jordan Telecom that raised its stake to 21.6 percent. Global Investment House (Global) announced Tuesday Global Full Acquisition Fund (LB) has obtained financial commitments of more than $500 million from the initial closure. The Fund aims to acquire majority shares of ordinary shares in private and listed companies in the Middle East, North Africa, Turkey, China, India and Pakistan. As the head of the private properties funds group in Global has assured that the Fund will achieve a target of $1.5 billion, an investment of 3 years, and it is possible to be covered during the two years, which includes 20 companies with an internal dividend average rate of 20 percent annually over the fund's life.

A local Arabic daily reported Global plans to buy 12.5 percent of Jordanian Arab East Investment Co to raise the company's share capital to 40 million Jordanian dinars ($56.47 million). Global intends to buy 50 million shares at one dinar each. Global bought 20 percent of Jordan United Bank at the start of the year.  The chief executive of Aayan Real Eatate Co (AAYANRE) announced that the company is currently establishing a real estate finance company called "ANAN" with a capital of KD 40 million, wholly owned by AAYANRE. He added during general assembly Tuesday morning, the company approved the capital increase from KD 17 to KD 32 million, and that ANAN will buy a real estate finance portfolio affiliated to Aayan Leasing and Investment Co. valued at KD 45 million, though the value does not include the retained profits amounting to KD 7.25 million.

Partnership
He also stated that ANAN is the company which would contribute to the company founded by Aayan Leasing and Investment Co in Saudi Arabia, which will work in the area of real estate finance with a Canadian strategic partnership. According to another report in an Arabic daily, Kuwait Financial Centre (Markaz) set up a real estate investment company in Saudi Arabia. The newspaper was citing Deputy Chairman Bassam al-Othman. Markaz holds 50 percent of the company. Around the region, Saudi Arabia's main index recouped some of its earlier losses in the session, paced by Arab National Bank and Samba Financial Group, which rise 2.09 percent and 1.18 percent respectively.

The index climbed 0.45 percent to 9,409.98 points, a day after it had its sharpest single-day drop in 11 weeks. "The market has been losing in the past two days and now it is picking up; it has a P:E 17 times expected 2007 earnings, which is an acceptable range for the market," said Hesham Abu Jamee, asset management head at Bakheet Financial Advisors. However, the index will continue to move sideways and will by the end of the year reach between 9,500 points and 10,000 points, Jadwa Investment said in a note. Ibrahim Al Alwan, Deputy, CEO, KSB Capital Group said about the Saudi market thatit is volatile and will continue to move sideways as long as there are new listings on the market. But on the long- to medium-term, it will move higher and will end the year on higher levels than it is now."

Stock markets in Abu Dhabi and Dubai extend their losses into at least the second day after investors rush to sell shares to compensate for losses suffered from Tuesday's plunge in shares of Dubai Ports World. Shares of the world's fourth-largest container ports operator plunged 5.15 percent, below its initial public offering price, on Tuesday, its second trading day on the Dubai International Financial Exchange (DIFX). "Investors were running around trying to sell their shares in order to make up the losses they lost in DP World because the fall was not expected at all on the second day," says Alaa El Din Moustafa, chief dealer at EFG-Hermes. Dubai's main index was down 0.67 percent at 5,207.83 points. Abu Dhabi's index fell 1.23 percent at 4,050.92 points. Oil eased towards $94 a barrel on Wednesday as investors took stock of negative economic data in top consumer the United States and bet on OPEC raising supplies. Mounting evidence that slowing US economic growth has eroded fuel demand has slowed a rally that took oil to $99.29 last week.

Boost
The prospect the Organization of the Petroleum Exporting Countries would boost output at a meeting next week added pressure. US oil slipped 39 cents to $94.03 a barrel, after tumbling $3.28 on Tuesday. London Brent crude shed 7 cents to $92.45 a barrel. "It's difficult to buy oil when you know that the market is worrying about a recession in the world economy, especially in the United States," said Ken Hasegawa of Fimat Japan Inc.

© Arab Times 2007

 

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