Gulf bourses track global exchanges higher

Author: 
ARAB NEWS
Publication Date: 
Tue, 2010-07-20 01:44

SABIC shares ended unchanged at SR87.75, having fallen as
much as 2.6 percent intraday after reporting a second-quarter profit, 11
percent below an average of forecasts as declining product prices hit revenues.
"SABIC remains a pure play on the global
economy," Credit Suisse wrote in a research note. "One cannot ignore
the signs of lower pace of recovery which increase the uncertainty of demand
outlook...with the recent recovery in crude oil prices, we might see an
improved pricing environment by Q4."
Credit Suisse kept its outperform rating and price target
of SR120 and other analysts said the stock remained cheap, although doubts
remain over the sector's growth prospects.
"The wider expectation is for petrochemicals
earnings to have peaked for this year in the first quarter and for margins and
profitability to decline," said a petrochemicals analyst who asked not to
be identified.
Savola Group dropped 2.3 percent after its second-quarter
profit fell, but Saudi Arabia's Tadawul All-Share Index (TASI) rose 0.23
percent to end at 6,131.3 points.
The sector activity for the day was mostly positive with
10 out of 15 sectors closing with gains ranging from 0.21 percent by the
Petrochemical sector to 2.51 percent by the Energy & Utilities sector. On
the other side the losses ranged from 0.08 percent by the Multi-Investment
sector and Transport sector to 1.20 percent by the Cement sector. The overall
market breadth for the day was positive with 84 advancers against 37 decliners
giving it an AD ratio of 2.27, the Financial Transaction House (FTH) said in
its daily market commentary.
Abu Dhabi's Aabar Investments rose 9.6 percent to 1.72
dirhams, surging for a second day since the market regulator told the company
to increase its buyback offer price to minority investors to 1.95 dirhams per
share as it seeks to delist from the bourse. The Abu Dhabi index gained 0.3
percent to 2,534 points.
Emirates Telecommunications Corp. (Etisalat) fell 0.5
percent to 10.35 dirhams after its second-quarter profit dropped 21 percent,
while domestic rival Du added 0.5 percent.
"Etisalat revenues were in line with expectations,
but net income fell short," said Irfan Ellam, Al-Mal Capital telecoms
analyst. "We still think the stock offers strong upside."
Al-Mal kept a "buy" recommendation on the
stock, setting a price target of 14.66 dirhams.
"Du is a factor because we estimate 85 percent of
Etisalat's revenues still come from domestic operations," added Ellam.
The Dubai index climbed 0.7 percent to 1,518 points.
"We would normally expect revenue to increase
year-on-year and quarter-on-quarter for companies that are performing well, but
the latter was only marginally up and that was probably because of more
domestic competition."
A selloff in global stocks lost steam on Monday and the
euro erased losses.
"We seem to be following global equity
markets," said Robert McKinnon, ASAS Capital chief investment officer.
"Other than that, we're waiting for more regional
earnings and there could be some positive surprises, but these are more likely
to come in the third and fourth quarters, with the focus on banks. 
"By then, we may see banks turn the corner in terms
of provisioning - it's a waiting game and this would be the main gauge for the
regional economies and particularly the UAE."
The Omani index inched up 0.1 percent to 6,227 points.
The Qatari index rose 0.2 percent to 6,924 points. The Kuwaiti index rose 0.1
percent to 6,501 points.
 
 
- With input from agencies

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