MIDEAST MORNING BRIEFING: Gulf Mkts Seen Rangebound, Egypt Volatile

Monday, May 28, 2012


 
Saudi SE              6989.45               -0.35% 
Dubai FM              1480.35               +0.05% 
Abu Dhabi SM          2460.36               -0.18% 
Kuwait SE             6277.21               -0.98% 
Doha SM               8490.12               +0.32% 
Muscat SM             5681.92               -0.46% 
Bahrain SE            1143.43               -0.17% 
Cairo SE              4798.14               -3.49% 
Amman                 1895.64               -0.01% 
 
ICE Brent $/bbl        107.47               +0.47% 
Gold $/troy oz        1574.60               -0.18% 
Euro-USD                 1.25                0.00% 
DJIA                 12454.83               -0.60%

By Nikhil Lohade

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Persian Gulf stock markets are seen trading in narrow ranges Monday as investors eye global leads with a focus on oil prices.

Local news flow is usually light during the summer months and activity will likely be driven by what's happening in the international markets, traders say.

In the wider region, Egypt's market is expected to be volatile in the coming days, after tumbling Sunday, as investors adopt caution ahead of a likely presidential runoff in mid-June between a former military commander and an Islamist leader.

"The market is reflecting concerns of uncertainty ahead of the runoff," said Sherif Salem, a fund manager at Abu Dhabi-based Invest AD. "It will likely remain volatile in this period as investors react to political headlines in the coming days," he added.

Asian stocks were mixed Monday, encouraged by news of political progress in Greece as four separate polls over the weekend showed Greece's pro-austerity conservative New Democracy party swung into first place ahead of next month's elections. But concerns about Spain's deteriorating financial situation remain a drag.

The euro rose against the U.S. dollar in a modest relief rally following the positive political polls in Greece over the weekend. But skepticism remained about the single currency's prospects.

Oil prices were slightly up Monday, after eking out a small gain Friday. Nymex July crude futures were last up $0.71 at $91.57 a barrel.

With the U.S. markets closed Monday for the Memorial Day holiday, analysts expect trading volumes to be light.

U.A.E.: Dubai shares finished +0.1% at 1480.35 Sunday; propped up by bank and real estate stocks.

EFG Hermes sees some potential benefits for Arabtec Holding from Aabar Investments' increased involvement in the company, that could include expansion in the oil and gas sector and the extension of the company's Abu Dhabi backlog. "Nonetheless, we wait for management to communicate a clear strategy regarding these potential benefits before drawing firm conclusions," it added.

Abu Dhabi's market was down 0.2% at 2460.36 Sunday; undermined by real estate stocks.

Sorouh Real Estate ended -1.9% at AED1.01 and Aldar Properties -0.9% at AED1.05. Any operational synergies between Aldar and Sorouh post their planned merger are unlikely to be realised within the next 2-4 years, unless the backlog of government commissioned projects increases sharply, according to EFG Hermes.

Heavyweight Etisalat ended -0.1% at AED8.82. The telco appears to be moving to a much more conservative, domestic-focused strategy, with a much more considered and conservative approach to international expansion, said one region-based analyst.

SAUDI ARABIA: The Tadawul market ended -0.4% at 6989.45 Sunday; petchem stocks led the decline.

Weak global leads, a trader noted; said the outlook for oil prices isn't very bullish in the near term and that is further weighing on sentiment.

Zain KSA said Sunday it has received regulatory approval for a SAR6 billion right issue, the proceeds of which will be used for debt reduction and network expansion.

Saudi Arabia's Capital Markets Authority, or CMA, said Sunday it has approved the long-awaited initial public offering of Saudi Airlines Catering Co.

KUWAIT: The benchmark stocks index ended 1% lower at 6277.21 Sunday.

QATAR: Doha's market finished up 0.3% at 8490.12 Sunday; supported by industry and bank stocks.

BAHRAIN: The main gauge of stocks ended -0.2% at 1143.43 Sunday; the service and industry sectors weighed.

OMAN: Muscat's market closed down 0.5% at 5681.92 Sunday; financial stocks were among the top losers.

Topaz Energy and Marine, the oilfield services subsidiary of Oman's Renaissance Services, on Sunday said it has secured the first tranche of a $330 million loan package to refinance some of its existing debt.

EGYPT: The benchmark EGX 30 Index closed 3.5% lower at 4798.14 Sunday. The gauge had added some 2% in the previous two sessions as voting for the presidential election was mostly peaceful.

Mobinil is likely to be removed from the benchmark EGX30 Index as the proportion of shares publicly owned and available for trading following its acquisition by France Telecom will fall short of the required level, a bourse spokesman said Sunday.

NEWS FROM AROUND THE GULF: Egypt's central bank has lowered the reserve requirement on local currency deposits to 10% from 12%, marking the second cut in two months to help free up cash for banks and business, the bank said in an emailed statement Sunday.

Bahrain-based Gulf International Bank, or GIB, said Sunday it has set up a 3.5 billion Malaysian ringgit ($1.1 billion) Islamic bond, or sukuk, program in a bid to diversify the lender's funding sources.

Dubai's Jebel Ali Free Zone (Jafza) has received consent from holders of its AED7.5 billion Islamic bond to repay the debt early.

Majan Telecommunications, the Oman-based mobile virtual network operator better known as Renna, is eyeing expansion in Saudi Arabia and Egypt, encouraged by the significant growth prospects both markets offer, the telco's chief executive said.

-By Nikhil Lohade, Dow Jones Newswires; +9714 446-1694; nikhil.lohade@dowjones.com; Twitter: @ZDJnews

(END) Dow Jones Newswires

28-05-12 0508GMT