JEDDAH: Stock markets in the Gulf were mixed on Thursday with Dubai rising despite a fall in crude oil prices, while Saudi Arabia’s decline was cushioned by hopes it will be put on review for possible emerging market status next week.
Riyadh’s stock index lost 0.5 percent after Brent crude dipped below $47 a barrel; all but one of the 14 listed petrochemical producers fell, with National Industrialization Co. (Tasnee) dropping 3.7 percent.
Jassim Al-Jubran, senior equity analyst at Riyadh-based Aljazira Capital, said the stock market’s losses were relatively small because most funds had been moving into shares that would benefit from any decision by index compiler MSCI next Tuesday to place Riyadh on review for possible upgrade to emerging market status.
“Funds can withstand volatility in oil markets because they build long-term positions, and the MSCI review next week is higher on their list,” said Al-Jubran.
The National Commercial Bank added 0.8 percent after its board recommended a cash dividend of SR1.1 per share for the first half of the year, up from the SR0.6 paid out for the prior-year period.
The Saudi Arabian Monetary Authority responded to the US Federal Reserve’s 25 basis point rate hike by lifting its reverse repo rate, at which commercial banks deposit money with the central bank, by the same amount to 1.25 percent but keeping its repo rate, used to lend money to banks, unchanged at 2 percent.
This is expected to be net positive for Saudi banks’ margins, but shares of other lenders were mostly lower on Thursday because the move had largely been priced in. Alawwal Bank fell 0.9 percent.
In Abu Dhabi, Dana Gas was the most heavily traded share, surging 7.4 percent. The stock has soared 78 percent since the start of the month in unusually heavy trade.
One Abu Dhabi-based stock broker, who declined to be named, told Reuters that he believed a strategic investor was building a position in the company.
The second most active stock, developer Aldar Properties , dropped 3.3 percent, dragging the index 0.8 percent lower.
The UAE hiked key interest rates by 25 bps, which is expected to hurt companies with large debts. Aldar has outstanding total debt of $1.63 billion, with 1.12 billion due by the end of the year, according to its balance sheet.
In Dubai, Emaar Properties climbed 1.3 percent after Morgan Stanley raised the stock to “overweight” from “equal weight” with a price target of 10.80 dirhams, up 23 percent from the previous target price.
Emaar has been strong since it said two weeks ago it would spin off its local real estate unit and offer its shares to the public, giving the proceeds to its shareholders as a dividend.
The Dubai index closed 0.3 percent higher.
In Egypt, Ezz Steel rose 0.5 percent, outperforming the index, which fell 0.2 percent.
Late on Wednesday the country’s largest steel maker told Reuters it could raise its production of rebar to its maximum capacity of 4.6 million tons per year if tariffs on imported rebar continued.
Cairo imposed temporary tariffs on steel rebar from China, Turkey and Ukraine last week; they are set to last for four months, in order to protect local manufacturers hurt by imports.
Shares of the largest lender, Commercial International Bank , fell 1.0 percent.
Riyadh’s stock index lost 0.5 percent after Brent crude dipped below $47 a barrel; all but one of the 14 listed petrochemical producers fell, with National Industrialization Co. (Tasnee) dropping 3.7 percent.
Jassim Al-Jubran, senior equity analyst at Riyadh-based Aljazira Capital, said the stock market’s losses were relatively small because most funds had been moving into shares that would benefit from any decision by index compiler MSCI next Tuesday to place Riyadh on review for possible upgrade to emerging market status.
“Funds can withstand volatility in oil markets because they build long-term positions, and the MSCI review next week is higher on their list,” said Al-Jubran.
The National Commercial Bank added 0.8 percent after its board recommended a cash dividend of SR1.1 per share for the first half of the year, up from the SR0.6 paid out for the prior-year period.
The Saudi Arabian Monetary Authority responded to the US Federal Reserve’s 25 basis point rate hike by lifting its reverse repo rate, at which commercial banks deposit money with the central bank, by the same amount to 1.25 percent but keeping its repo rate, used to lend money to banks, unchanged at 2 percent.
This is expected to be net positive for Saudi banks’ margins, but shares of other lenders were mostly lower on Thursday because the move had largely been priced in. Alawwal Bank fell 0.9 percent.
In Abu Dhabi, Dana Gas was the most heavily traded share, surging 7.4 percent. The stock has soared 78 percent since the start of the month in unusually heavy trade.
One Abu Dhabi-based stock broker, who declined to be named, told Reuters that he believed a strategic investor was building a position in the company.
The second most active stock, developer Aldar Properties , dropped 3.3 percent, dragging the index 0.8 percent lower.
The UAE hiked key interest rates by 25 bps, which is expected to hurt companies with large debts. Aldar has outstanding total debt of $1.63 billion, with 1.12 billion due by the end of the year, according to its balance sheet.
In Dubai, Emaar Properties climbed 1.3 percent after Morgan Stanley raised the stock to “overweight” from “equal weight” with a price target of 10.80 dirhams, up 23 percent from the previous target price.
Emaar has been strong since it said two weeks ago it would spin off its local real estate unit and offer its shares to the public, giving the proceeds to its shareholders as a dividend.
The Dubai index closed 0.3 percent higher.
In Egypt, Ezz Steel rose 0.5 percent, outperforming the index, which fell 0.2 percent.
Late on Wednesday the country’s largest steel maker told Reuters it could raise its production of rebar to its maximum capacity of 4.6 million tons per year if tariffs on imported rebar continued.
Cairo imposed temporary tariffs on steel rebar from China, Turkey and Ukraine last week; they are set to last for four months, in order to protect local manufacturers hurt by imports.
Shares of the largest lender, Commercial International Bank , fell 1.0 percent.
