UAE property developers’ earnings give Gulf markets a boost

(File photo: Reuters)
Updated 17 February 2019
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UAE property developers’ earnings give Gulf markets a boost

  • Real estate sector gets confidence boost
  • DAMAC gains despite 87 pct drop in Q4 net profits

DUBAI: Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate.

The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.

“The market is starting to rebuild confidence in earnings as a driver for sentiment,” said Arqaam Capital in a research note. “Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall,” Arqaam said.

“But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co’s, Aldar) out of market consolidation.” Emaar Properties, Dubai’s largest listed developer, reported a 27 percent rise in fourth-quarter profit.

The stock rose 2 percent on Sunday. DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits.

In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018. In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options.

The Saudi index closed 0.4 percent down, in contrast to the rest of the region’s markets. Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier.

The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank < 1150.SE> and Al Rajhi Banking & Investment Corp. lost 0.3 percent and 0.6 percent, respectively.

In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.

SAUDI The index lost 0.4 pct to 8,592 points ARABIA DUBAI The index rose 0.6 pct to 2,550 points ABU DHABI The index rose 0.7 pct to 5,070 points QATAR The index gained 0.7 pct to 10,011 points EGYPT The index rose 1.4 pct to 15,199 points KUWAIT The index gainedd 0.1 pct to 5,427 points OMAN The index was down 0.8 pct at 4,077 points BAHRAIN

The index went up 0.6 pct to 1,381 points ($1 = 3.7502 riyals)


Leisure chief hails Saudi Arabia’s $64 billion entertainment revolution

Updated 37 min 36 sec ago
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Leisure chief hails Saudi Arabia’s $64 billion entertainment revolution

  • Projects in the pipeline exxpected to create over 22,000 jobs and contribute over $2 billion to GDP by 2030
  • KSA’s travel and tourism sector accounted for about $65 billion of the Kingdom’s gross domestic product (GDP) in 2016

RIYADH: Saudi Arabia is on the brink of a $64 billion entertainment revolution, a leisure business chief said on Sunday.

Projects in the pipeline will cater for more than 50 million visitors, create over 22,000 jobs and contribute over $2 billion to GDP by 2030, said Bill Ernest, chief executive of the Saudi Entertainment Ventures Co. (SEVEN). 

Ernest, a former Disney executive and a veteran of the entertainment industry, is already behind SEVEN’s venture with AMC Group to open cinemas in the Kingdom, its first new film venues in over 35 years.

He told delegates at a conference in Dubai on Sunday that Saudi Arabia’s travel and tourism sector accounted for about $65 billion of the Kingdom’s gross domestic product (GDP) in 2016, making it more valuable than the automotive industry, manufacturing, agriculture and banking.

He said travel and tourism in the Kingdom sustained over a million jobs that year, and that the sector had expanded by 38.2 percent since 1997.

SEVEN is one of the first companies in Saudi Arabia to embrace government investment plans of $64 billion to develop entertainment over the next decade. Ernest sketched out SEVEN’s plans for the funds, giving details of a massive multi-cluster family entertainment destination in Riyadh.

Featuring cinemas, augmented reality activities, green open areas equipped for sports and aquatic activities, live show venues and restaurants, the Riyadh destination will be the first of many such projects planned across the country, as part of the Kingdom’s Vision 2030 program.

Job creation, Ernest said, was key to the project’s viability. “Our offerings will create exciting new roles for ambitious young Saudi nationals. We will need to provide training in new skill sets.

“While employing locals, we also want to create friendly, awe-inspiring environments where Saudi nationals will want to spend quality time with their family and friends.

“SEVEN aims to be the leader in Saudi Arabia’s entertainment ecosystem. We aim to facilitate the presence of both international and local brands, and in doing so, become the national entertainment champion.”