JEDDAH/DUBAI: Most Gulf Arab bourses rose yesterday tracking strength in oil prices with Qatar, the day’s biggest gainer, jumping more than 4 percent.
“The Qatari market has underperformed this year despite its being the fastest growing economy in the world, so it has been playing catch up with the rest of the market over the last two months,” said Shakeel Sarwar, of Sico investment bank.
Banks were among the biggest gainers led by Industries Qatar, which climbed almost 5 percent. Qatar’s bourse is down 2.6 percent so far this year, but has rallied almost 55 percent since the beginning of March. The Qatari index surged 4.51 percent to 6,709 points. Oman was the second-best performing market in the region climbing 1.44 percent. Banks led with Bank Sohar soaring more than 7.25 percent, to close at its highest level in more than five months.
“We believe oil will continue to $70 and if that happens our market will continue to rise,” said Adel Nasr, local brokerage manager at United Securities in Muscat.
The benchmark Omani index climbed 1.44 percent to 5,405 points. National Bank of Oman advanced 2.5 percent and Bank Muscat 1.09 percent.
Abu Dhabi rose after two trading days of declines while property stocks led Dubai more than 1 percent lower, reversing strength earlier in the previous session.
Emaar Properties and Deyaar fell 1.52 percent and 3.03 percent respectively.
The Abu Dhabi index edged 0.36 percent higher to 2,623 points. First Gulf Bank rose 3.85 percent and Abu Dhabi National Energy Co. (Taqa) increased 1.73 percent. The Dubai index fell 1.18 percent to 1,652 points.
Saudi Arabia and Bahrain both rose for a second trading day while Kuwait fell.
The benchmark Kuwaiti index eased 0.07 percent to 7,737 points. The Bahraini measure advanced for a second trading day, rising 0.11 percent to 1,635 points. The Tadawul All-Share Index (TASI) climbed 0.45 percent to 6,044 points.
Alinma Bank and Al-Rajhi Bank rose 3.8 percent and 0.7 percent respectively.
Within the past 4 trading sessions the index was moving in a tight range between 5,904 and 6,078, which in a way could somehow ease the congested readings from the technical indicators but only for a while. We maintain a bullish stance cautiously unless the 5 days exponential moving average is broken on the down side; the current level of this average is 5,978, the Jeddah-based Financial Transaction House (FTH) said in its daily market report.
Meanwhile, Nomura International cautioned that investors are better off investing in Etihad Etisalat (Mobily) stock than that of Saudi Telecom Co. (STC’s) and Zain.
In a report on investment in telecommunications in the Gulf region recently, the telecommunications services house recommended that investors choose Mobily stocks.
Nomura said investors should minimize investment in Zain, citing the company’s heavy initial losses and its ongoing dependence on Mobily’s network.
Nomura also cautioned against investing in STC, saying that the Kingdom’s first mobile operator is facing increasingly stronger competition from the other two operators. Nomura recommended buying Mobily’s stock thanks to the strength of its market value and its short but rich track record of remarkable achievements.
Nomura highlighted Mobily’s viability compared to other telecommunication operators in the Kingdom in terms of investment, citing the fact that the company’s focus on mobile services and its proven track record of rapid execution of its plans and projects.
Nomura estimated the fair value of Mobily’s stocks at SR53.4 per share, which compares favorable to the current nominal value of SR36.3, meaning highly lucrative returns on trading.
Nomura concluded that it views Mobily positively compared to the other operators in the Kingdom, thanks to its proven proficiency in building its business. Mobily demonstrated the strength of its financial standing and focus on the Saudi market, thus minimizing risks from diversifying its activities, Nomura said.
Zain, the Kingdom’s third operator, still incurs heavy incorporation losses and needs a long time to recover the amount of money it spent on acquiring the third license, hurting its chances of realizing any operational revenues in the near future, the world-renowned firm said.
Another factor that discourages from investing in Zain stocks, Nomura added, is the fact that its network is far from complete. The company is still greatly dependent on its rival Mobily’s network.
Nomura also anticipated a steady decline in STC’s market share due to fierce competition from the other two operators, even though STC is still monopolizing landline services.
— With input from agencies
