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Arabtec weighs on Dubai; Qatar gains

JEDDAH/DUBAI: Dubai's Arabtec weighed on the emirate's index on Sunday as investors reacted to the firm's lower-than-expected Q3 earnings while other regional markets gained on high oil prices and strong global markets.

Arabtec dropped 5.1 percent, its biggest fall since May 25, after its third-quarter net profit slumped 96 percent on rising expenses and a sharp drop in revenues, falling well short of analysts forecasts.

The largest builder in the United Arab Emirates by market value, made a net profit of 6.8 million dirhams ($1.85 million) in the three months to Sep 30, compared with a net profit of 166.6 million dirhams in the same period last year.

"Operationally, revenues were on track, but the big miss came in the form of fresh provisions," says Majed Azzam, AlembicHC real estate analyst. "That's what investors have reacted to -- it seems like the company is uncomfortable with some of the receivables on its books."

Property developer Deyaar added to the fall after it declined 7.8 percent to a near 7-week low. The firm reported a third-quarter net loss of 145 million dirhams ($39.49 million) on Thursday.

Dubai's benchmark was the worst performer in the Middle East markets, dropping 0.9 percent.

In Qatar, bellwether Industries Qatar (IQ) reached a near 16-month high tracking gains in Saudi Arabia the day before on strong oil prices. IQ gained 3.8 percent, its highest close since June 15 last year.

"Petrochemical companies like IQ are reacting to oil prices," said Marwan Shurrab, vice president and chief trader at Gulfmena Alternative Investments, he said. Qatar's benchmark rose 0.7 percent.

Saudi Arabia's index fell by 0.4 percent as traders booked profits after a rally a day before.

The Tadawul All-Share Index (TASI) closed down at 6,436.21 points after gaining 25.53 points; down -0.04 percent. The sector activity for the day was mixed with seven gaining sectors against eight losing sectors. The gaining sectors ranged from 0.04 percent by the hotel and tourism sector to 1.70 percent by the transport sector. On the other hand the losing sectors for the day ranged from -0.01 percent by the cement sector to -0.67 percent by the banks and financial services sector. The overall market breadth for the day was negative with 48 advancers against 70 decliners giving it an AD ratio of 0.68. The liquidity for the day reached SR3.61 billion.

The board of Kuwait's telecom firm Zain approved opening the company's books for due diligence by UAE's Etisalat which has offered to buy 46 percent of the firm, a source close to the deal told Reuters on Sunday.

Zain climbed 2.8 percent on news that the company's board meeting. The broader Kuwait index however slipped ending lower by 0.1 percent.

Meanwhile, Abu Dhabi's benchmark climbed 0.7 percent to 2,770 points, Oman's index added 0.5 percent to 6,550 points. Bahrain's stocks fell 0.2 percent to 1,463 points.

© Arab News 2010