DUBAI/JEDDAH: Most Middle East markets rose on Monday, shrugging off declines on global exchanges, as further earnings announcements and steadying oil prices boosted regional sentiment.
Dubai made its largest gain for a week, Abu Dhabi was up for a fourth day and Qatar rose, although this trio are in the red for 2010 and analysts say volumes are insufficient to spark a sustained uptrend.
Bahrain and Egypt rose, but Saudi Arabia fell for a fourth day in five and Kuwait and Oman also declined.
World shares slunk to three-month lows on concerns about Chinese inflation and Greece’s debts, but underperforming Gulf Arab markets seem less in danger of a further correction after markedly underperforming their global peers over the past year and so should move sideways for now.
“The market has priced in the worst for stocks across the board, regardless of sector, and so when results do come out we’re seeing a positive reaction even if the figures are bad,” said Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co.
National Bank of Abu Dhabi rose 1.8 percent after reporting a slight drop in quarterly profit. The stock is down 12.2 percent in seven weeks as investors worry about UAE lenders’ likely provisions.
Emirates Telecommunications Corp (Etisalat) climbed 0.9 percent after fourth-quarter profit rose 40 percent. This missed forecasts, but Vyas Jayabhanu, head of investments, Al-Dhafra Financial Broker, said local investors were increasingly turning to Etisalat, seen as a safe haven amid sustained volatility and increasing risk aversion.
Dubai’s Union Properties rose 3.9 percent after saying a luxury hotel could be sold, potentially easing a liquidity squeeze, with the troubled developer rescheduling 2.8 billion dirhams ($762.3 million) of debts.
Saudi Arabia’s Tadawul All-Share Index (TASI) dropped slightly and weakening oil prices may weigh on long-term sentiment.
Saudi Basic Industries Corp (SABIC) lost 1.4 percent and has fallen 6.5 percent from Jan. 20’s 15-month high as sliding oil prices dampen demand for petrochemicals stocks.
Despite Sunday’s attempt at closing above the previous support level of 6,250, the market was unable to sustain the momentum and Monday saw it once again dipping below the level, the Financial Transaction House (FTH) said in its daily market commentary.
Sector losses ranged from 0.0 percent in hotel and tourism to 0.58 percent in both the energy and utilities and petrochemical industries. On the other hand, sector gains ranged from zero percent in the building and construction to 0.44 percent in retail, extending over six sectors. Overall market breadth was negative, with 43 advancers and 72 decliners registering an AD ratio of 0.60, FTH said.
Qatar’s index rose for a second day in three, but is down 5 percent this year and not far from a six-month low. “Most portfolio managers have already taken their positions in Qatar and so Qatar continues to underperform,” said a Kuwait-based analyst who asked not to be identified. National Bank of Kuwait rose 3.8 percent after the lender’s fourth-quarter profit quadrupled, beating an analysts’ forecast. It slipped to a nine-week low intraday before its earnings were released mid-session.
— With input from agencies