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Feb 12 2012

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MIDEAST MORNING BRIEFING: Gulf Stocks Seen Nervy On Greece, Eurozone Debt

Saudi SE             6804.03                +0.10% 
Dubai FM             1486.90                +0.30% 
Abu Dhabi SM         2466.74                +0.08% 
Kuwait SE            5864.00                +0.23% 
Doha SM              8689.83                -0.01% 
Muscat SM            5622.18                -0.02% 
Bahrain SE           1136.87                +0.07% 
Cairo SE             4753.65                +0.94% 
Amman                1967.65                +0.85% 

ICE Brent $/bbl       117.31                -0.30% 
Gold $/troy oz       1734.90                -0.03% 
Euro-USD                1.32                +0.00% 
DJIA                12801.23                -0.70% 

 

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Stocks in the Persian Gulf are likely to adopt a negative bias early Sunday as renewed fears of a Greek default pinned global markets deep in the red late last week, while a sharp drop in U.A.E.-based Etisalat's fourth quarter profit could keep the region's telecom shares under the cosh.

"Caution about the future for Greece continues to dominate," said one European-based equity trader. "Until all the deadlines (Greece debt) pass, markets and investors will continue be edgy," he added.

Wall Street turned in a downbeat performance Friday with the Dow Jones Industrial Average's dropping 89.23 points, or 0.7%, to 12801.23, its biggest slide since Dec. 28. Traders cited concerns about Europe's sovereign-debt crisis, particularly Greece. European stocks fared worse with Germany's DAX index falling 1.4%, and France's CAC-40 shedding 1.5%.

SAUDI ARABIA: The Gulf's largest market ended up 0.1% at 6804.03 Saturday.

Petrochemical shares outperformed with National Industrialization Co. jumping 0.5% to SAR39.70. Credit Suisse, in a note to clients, said it's time to take calculated risks in the Mena petrochemicals space. Analyst Digvijay Singh said he expects product margins to inch up slowly from current levels, while Middle Eastern valuations price in depressed margins. On top of this, operating rates could inch higher, providing further upside.

"In our optimistic scenario, which is the base case for our economists' forecasts, world operating rates could increase, providing a further potential fillip to margins," said Singh.

U.A.E.: Dubai's market closed +0.3% at 1486.90 Thursday; the benchmark index has added about 14% since mid-January.

Arabtec Holding ended Thursday +3% at AED2.74. The stock fell 1.5% Wednesday after adding some 70% this year. A white hot rally in Arabtec shares this year is most likely linked to some investors re-rating the construction company due to its growth prospects, market observers told Zawya Dow Jones last week.

Abu Dhabi's market finished up 0.1% at 2466.74 Thursday.

After the bell, Etisalat, the Middle East's biggest telecom provider by market value, posted a 65% slide in fourth-quarter net profit as a hefty impairment charge related to its Indian operations weighed. Its shares ended flat at AED9.45 before its 4Q results were released.

KUWAIT: The market finished +0.2% at 5864.00 Thursday.

QATAR: Doha's market closed flat at 8689.83 Thursday.

Qatar National Bank has planned a series of investor meetings, starting Feb. 13 in London, ahead of a potential dollar-denominated bond, one of the banks organizing the meetings said Thursday. Its shares closed 0.6% higher at QAR136.70.

BAHRAIN: The main gauge of stocks closed +0.1% at 1136.87 Thursday.

Analysts at NBK Capital said Batelco's recent exit of the Indian market is positive for the stock. "Given that Batelco had already been looking to divest its stake in STel [its Indian Unit], the sale itself does not come as a surprise to us," it added. Batelco shares closed flat at BHD0.394.

OMAN: Muscat's market closed unchanged at 5622.18 Thursday.

EGYPT: The market closed up 0.9% at 4753.65 Thursday; the benchmark index is now up more than 30% this year, after dropping 49% in 2011.

Telecom stocks came in for close attention Thursday. Shares of the Egyptian Co. for Mobile Services, or Mobinil, rallied 10% on speculation that Orascom Telecom Media and Technology, or OTMT, is in talks with France Telecom over selling its stake in Mobinil.

"There was no information communicated to us about the matter," Zeyad Mourad, Mobinil's spokesman told Zawya Dow Jones by telephone. "Nothing formal was sent to us over any changes in the future of Mobinil." Mobinil shares closed up 10% at EGP137.89 in Cairo trading Thursday.

Mobinil shares received a further fillip from Goldman Sachs raising it to buy from neutral rating and increasing its target price to EGP212 from EGP97.

NEWS FROM AROUND THE GULF: Standard & Poor's Ratings Services downgraded Egypt's sovereign credit rating one notch further into junk territory, saying the country's external financing risks are likely to weaken further, absent stabilization in its domestic political situation. The ratings company lowered Egypt to B from B-plus, leaving it five steps below investment grade. The outlook is negative.

Qatar said Thursday it has signed a deal to supply South Korea with 2 million metric tons a year of liquefied natural gas, or LNG, for 20 years from 2013, the latest in a string of deals struck over the last two months with energy-hungry Asian countries.

Former Nakheel Chief Executive Chris O'Donnell has won a $3 million claim against the Dubai real-estate developer for breach of contract, the Dubai World Tribunal ruled Thursday.

Paul Koster, the chief executive of the Dubai Financial Services Authority, is leaving his post with the regulator after four years in the position.

U.A.E.'s Etihad Airways plans to continue its aggressive expansion this year by looking at potential acquisitions, and will consider buying a stake in alliance partner Virgin Australia, after posting its first ever net profit in 2011 as it flew more passengers and opened new routes, its top executive said Thursday.

The Lebanese economy is at risk from internal political uncertainty, spiralling violence in neighboring Syria and the euro-zone crisis, the International Monetary Fund has warned.

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

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

12-02-12 0457GMT