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Jun 21 2012

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MIDEAST MORNING BRIEFING: Gulf Stocks Seen A Touch Lower on FOMC, MSCI

Saudi SE             6838.05                +0.30% 

Dubai FM             1476.57                -0.18% 

Abu Dhabi SM         2489.55                +0.87% 

Kuwait SE            5916.73                -0.48% 

Doha SM              8307.18                -0.08% 

Muscat SM            5689.59                -0.19% 

Bahrain SE           1129.23                +0.05% 

Cairo SE             4108.40                +0.51% 

Amman                1903.37                +0.03% 

 

ICE Brent $/bbl        92.23                -0.50% 

Gold $/troy oz       1602.60                -1.45% 

Euro-USD                1.27                -0.16% 

DJIA                12824.39                -0.10% 

 

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Stocks in Arab Gulf region are likely to adopt a slightly negative bias Thursday, mirroring similarly weak action on global markets, after the U.S. Federal Reserve failed to stump up with the aggressive policy easing measures that many investors around the world had been expecting.

Although some investors will take heart from the Fed saying it is "prepared to take further action" to help the world's biggest economy if necessary, many were expecting a far stronger response. In the end, the Fed extended Operation Twist--an attempt to keep long-term borrowing costs low by selling short-term Treasurys and putting the money into long-term bonds.

On Wall Street overnight, the Dow Jones Industrial Average finished down 12.94 points, or 0.10%, at 12824.39 rebounding from an intraday loss of 92 points. U.S. oil futures meanwhile sank to their lowest level in eight months after the government said oil inventories rose to their highest level since 1990, while gasoline demand in the U.S. fell sharply.

U.A.E.: Dubai's market closed 0.2% lower at 1476.57 Wednesday.

Dubai is still the cheapest market in the GCC on a price-to-book basis and the "valuation case for Dubai continues to be an argument for further upward potential," analysts at Daman Investments said in a note to clients Wednesday.

In terms of stocks, Tamweel fell 2.5% to AED1.17. The home financing company owned by Dubai Islamic Bank is set to sell a $235 million Islamic bond, or sukuk, backed by the company's mortgage book, according to ratings agency Moody's Investors Service.

In Abu Dhabi, the benchmark index there finished up 0.9% at 2489.55.

Shares of Arkan Building Materials rose 1.3% to AED0.80. On Wednesday, it said it secured a 1.4 billion U.A.E. dirham ($381 million) loan to refinance existing borrowings. First Gulf Bank, Union National Bank and Emirates NBD held a majority of the new loan, Arkan said.

Abu Dhabi National Energy Co., better known as Taqa, said it will work with the Centre of Waste Management Abu Dhabi to create the country's first waste-to-energy facility based in the U.A.E. capital, a project that when completed will rank as one the world's largest of its kind. Its shares ended flat at AED1.24.

SAUDI ARABIA: The Saudi market is closed for the weekend. The Tadawul Index finished 0.3% higher at 6838.05 Wednesday.

KUWAIT: The market finished 0.5% lower at 5916.73 Wednesday.

Kuwait's Boubyan Bank Wednesday said its board considers "fair and suitable," National Bank of Kuwait's offer to acquire an additional stake in it at 0.630 Kuwaiti dinar ($2.25) a share. Boubyan Bank shares ended Wednesday down 1.6% at KWD0.62, while National Bank of Kuwait lost 1.9% to KWD1.02.

QATAR: Doha's market closed Wednesday off 0.1% at 8307.18. The index is down over 5% this year, making it the worst performer in the GCC region.

"A function of several factors: banks, which dominate the Qatar Index, 2011 dividends disappointed the market and with increasing competition 2012 is not looking very exciting. In addition the much-awaited avalanche of government spending may not hit P&L's of companies in earnest till 2013 or even 2014," said one local fund manager.

On a stock level, Qatar Telecom fell 0.6% to QAR108.30, while Commercial Bank of Qatar lost 0.1% to QAR68.90.

BAHRAIN: The main gauge of stocks closed up 0.1% at 1129.23.

OMAN: Muscat's market ended down 0.2% at 5689.59 Wednesday.

EGYPT: The market closed 0.5% higher at 4108.40 Wednesday, snapping its recent losing streak.

Regardless of Wednesday's small advance, analysts note investors continue to fret that a possible showdown between the Muslim Brotherhood and the country's military rulers might stall necessary economic progress.

"The key problem has been that with SCAF essentially grabbing a substantial amount of power following decrees they made last week (including dissolving parliament), many are worried that key policy decisions that are urgently needed to rescue the country will now not get taken or at least will be delayed until a new constitution is written and a new parliament is elected - this could be 6 months or more away," says said Mike Millar, head of research at Cairo-based Naeem Brokerage.

In terms of stocks, Citadel Capital rose 2.1% to EGP2.43 and OTMT jumped 1.6% to EGP1.30.

NEWS FROM AROUND THE GULF: The Dubai Financial Services Authority, or DFSA, which regulates activities in Dubai's financial free zone, Wednesday said two new laws granted it greater oversight over securities offerings and auditors of locally incorporated firms listing shares in the free zone or in any other jurisdiction.

Bahrain's Mumtalakat Holding Company, the country's sovereign wealth fund, said Wednesday it has no current plans to increase its stake in U.K.-based sports-car maker McLaren.

The Middle East's mobile telephone penetration level reached 96% in the first quarter of 2012, with the total number of subscriptions standing at 266.3 million, according to Sweden's L.M. Ericsson Telephone Co.

-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

21-06-12 0507GMT

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