JEDDAH/DUBAI: Kuwait’s Zain made its largest gain in four weeks on Tuesday after the telecoms operator called an extraordinary general meeting for Aug. 31, fuelling investor speculation about a possible takeover bid.
Most Gulf benchmarks rose, with Qatar and Dubai hitting eight-week closing highs, while Oman’s index finished at its highest level since Dec. 1.
Kuwait made its largest daily gain in four weeks and Abu Dhabi and Bahrain also rose, but Saudi Arabia fell for the second session in three as profit-taking in Saudi Basic Industries Corp. (SABIC) and concerns over the scale of bank provisions weighed.
Zain surged 7.8 percent to a 10-month closing high. A trader said investors were betting the meeting could pave the way for a foreign firm to take a significant stake in the operator.
This followed a newspaper report earlier this week that said key Zain shareholders were in talks with an unidentified Asian group to sell more than 40 percent of the firm.
Zain’s rise helped Kuwait’s index advance 1.8 percent to its highest close since July 5. The index closed at 7,909 points.
National Real Estate Co. surged 6.7 percent after reporting a 37 percent rise in second-quarter profit. These earnings boosted Agility, which climbed 3.2 percent. NRE holds a 22.4 percent stake in the logistics firm.
Gulf Finance House plunged 4.9 percent, a day after the firm reported its third successive quarterly loss.
Dubai’s index climbed 1.2 percent to 1,954 points. Emaar Properties surged 4 percent to 3.35 dirhams, its highest finish since June 24, the penultimate day’s trading before it announced plans to merge with three units of Dubai Holding on June 26.
Emaar has gained 22.3 percent since it reported a second quarter loss of $351 million after it wrote off the value of bankrupt US unit John Laing Homes.
“Now Emaar has written off its US losses, investors believe the company has turned over a new leaf, having reduced costs and changing its management structure,” said Vyas Jayabhanu, head of investments, Al-Dhafra Financial Broker. “People are positive about Emaar, which wasn’t the case a few months ago.”
Abu Dhabi’s measure rose 0.6 percent. Aabar Investments was the main gainer after the firm said it was setting up vehicle and engine manufacturing plants in Algeria with five German firms, including affiliate Daimler.
Aabar climbed 5.2 percent to its highest close since Nov. 5 last year. Aldar Properties and Sorouh Real Estate also rose. Sorouh appointed a new chief financial officer on Tuesday.
“Aldar is a stable company, with good long-term prospects and so we’re seeing a lot of long-term investors moving into the stock and the same goes for Sorouh,” said Jayabhanu.
Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, said the Dubai and Abu Dhabi indexes would soon test their next major resistance levels of 2,000 and 2,900 points respectively.
“Sustained strength in Saudi and oil above $70 should get us there before too long,” added Wakeman. “We are likely to see moderate profit-taking toward the end of the week, but the trend remains higher.”
Bank Muscat rose 1.9 percent to a seven-month closing high.
“Bank Muscat is one of the cheaper banks and its overseas problems are now discounted in the price and so it looks like an interesting buy for investors,” said Syed Quadry, vice-president of business development at Amwal Investment.
Saudi Basic Industries Corp (SABIC) fell 1.7 percent as investors booked profits from Monday’s 6.1 percent rise. Despite Monday’s rally, Tuesday’s market was unable to uphold any gains and closed with a loss, spending most of the day in the red. Sector activity was split, with 8 advancing sectors and 7 declining sector. Furthermore, market breadth was also almost neutral with 53 advancers and 55 decliners, registering an AD ratio of 0.96, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.
The Tadawul All-Share Index (TASI) fell 0.3 percent to 5,870 points.
— With input from agencies
