Dubai's bourse rose for a second day, but volumes slumped to an 11-week low as uncertainty over the emirate's debts deterred traders, while likely dividends drew buyers to Oman and Abu Dhabi, and the Saudi market hit a new 16-week high.
The Tadawul All-Share Index (TASI)
Banks helped the Saudi index rise 0.46 percent to its highest close since Oct. 28. SABB climbed 2.43 percent and Samba Financial Group added 1.78 percent. The Tadawul All-Share Index (TASI closed at 6,411.44.
A positive close to the week, which was supported by gains in 11 sectors. The four sectors which saw losses on Wednesday were the Retail, Media & Publishing, Agriculture & Food Industries and the Transport sectors, which saw losses of 0.02 percent, 0.10 percent, 0.47 percent and 0.61 percent respectively. Sector gains ranged from 0.10 percent in Real Estate Development to 1.88 percent in the Cement sector. Overall market breadth was almost neutral with a positive bias, as 59 advancers beat out 57 decliners to record an AD ratio of 1.04, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.
The Dubai index rose 0.4 percent to 1,628 points, while the Abu Dhabi index climbed 1.1 percent to 2,759 points.
Zain climbed 6.8 percent to its highest close since Oct. 26, rising for a second day since saying it was in talks with Bharti Telecom to sell some of its African operations.
"Zain's deal is good - the company, shareholders and banks will all benefit," said Naser Al-Nafisi, general manager for Al-Joman Center for Economic Consultancy in Kuwait.
As the largest listed company in Kuwait, Zain's shares were widely used by investors as collateral to obtain loans from banks. When Zain's share plunged 44 percent between Sept. 6 and Feb. 3, bank stocks also suffered.
Zain's likely deal lifted bank stocks earlier this week, with investors subsequently cashing in. National Bank of Kuwait dropped 4.7 percent and Kuwait Finance House lost 5 percent. the index fell 1 percent, its biggest fall since Jan. 27 and ending an 11-session winning streak. It is up 5.2 percent this year.
"Our outlook is for Kuwait to gain 10 percent this year, so the market can do more, but not that much," Al-Nafisi added.
"Banks should outperform in 2010," said Youssef Kassantini, an independent financial analyst. "Most of them took big provisions last year, so they should have cleared all their losses from non-performing loans and this should convert into bigger profits this year."
Emirates Telecommunications Corp. (Etisalat) climbed 3.1 percent, hitting a 16-week closing high.
"Etisalat has been performing extremely well and it's a pure dividend play," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.
"Etisalat is a safe haven and so if investors don't want volatility they head toward the more stable telecoms and cement sectors, which also offer good dividend yields."
UAE investors are placing increasing importance on dividends with markets in retreat since Dubai World's November debt standstill request.
Oman's benchmark claimed a fresh 18-week high on increasing demand from regional and foreign investors. The
"Dividend season is driving the market - most results are out and asset managers and Gulf investors are continuously buying," said Adel Nasr, United Securities brokerage manager.
Egypt's index fell 1.3 percent, with Orascom Telecom dropping 7.3 percent after Algerian sources said the government wants it to leave.
- With input from agencies
