Qatar market drops 1.4%; Dubai shares down 4.1%

DUBAI: Dubai’s bourse fell sharply as investors booked profits in the region’s best-performing market this year, while Egypt was lifted by the inauguration of a new president and an offer to buy a large stake in investment bank EFG Hermes.
The Dubai benchmark tumbled 4.1 percent to 4,771 points, its biggest decline since May 20.
Builder Arabtec led losses, tumbling 9.7 percent to AED5.42.
Profit-taking hit Qatar too, especially in stocks that had shot up earlier as index compiler MSCI upgraded Qatar and the UAE to emerging market status at the end of May.
Masraf Al-Rayanand Qatar Islamic Bank fell 5.0 and 2.0 percent respectively, weighing on the Doha index, which was down 1.4 percent.
A drumbeat of negative publicity about Qatar’s hosting of the 2022 World Cup is one factor encouraging the profit-taking.
Most people remain optimistic about the Gulf markets in the long term, but with Ramadan and the usual summer lull approaching, fresh catalysts absent and the markets already sitting on big gains — Dubai is up 42 percent year-to-date — the temptation to take profits is strong.
Analysts said the Dubai index could find immediate support at 4,750 points but only a break over 5,200 points would be considered bullish.
Some technical indicators point to a deeper drop; Monday’s slide confirmed a break on the downside of a symmetrical triangle formed by the highs and lows since mid-May.
The pattern suggests the consolidation of the last few weeks will be followed by another leg down: the triangle points to around 4,200 points.
Shares in National Central Cooling Co. (Tabreed) slid 7.5 percent on Monday after it said Abu Dhabi state-owned investment fund Mubadala would convert bonds that it holds into 79.4 million new Tabreed shares. The conversion will raise Tabreed’s outstanding shares to 738.5 million, diluting other shareholders.
Abu Dhabi’s bourse also continued to retreat, down 1.0 percent, although the two biggest banks, National Bank of Abu Dhabi and First Gulf Bank, reversed early-session losses and edged up 1.0 and 0.3 percent respectively.
Egypt’s index added 1.1 percent. Shares in investment bank EFG Hermes jumped 5.5 percent to 15.28 pounds, acting as the main support for the benchmark.
A group of investors represented by Beltone Financial, which rocketed 10.0 percent on Monday, offered last week to buy 20 percent of EFG Hermes at 16.00 pounds per share. The market jumped 4.7 percent in an initial response to the news last Thursday.
“There is also speculation that EFG might activate its share buy-back program in order to counter the offer from Beltone,” noted Mohamed Radwan, director of international sales at Pharos Securities.
Apart from the EFG Hermes offer, the market was supported by generally optimistic sentiment as the country has an elected president for the first time in almost a year, he added.