Most Middle East benchmarks made minor gains, but trading
was light.
"Regional markets are still directionless to
slightly lower, despite positive developments on international markets - we're
not reacting because it is summer and this trend will continue until after Ramadan,"
said Shakeel Sarwar, Sico investment bank head of asset management.
SABIC fell 2 percent to SR86.50 and Saudi Kayan dropped
3.6 percent to a two-month low of 17.30, but banks helped Saudi Arabia's index
rise for a third session in four.
The Tadawul All-Share Index (TASI) increased 0.68 percent
to 6,217.23 points. The sector activity for the day was mixed with 8 gaining
sectors and 7 losing sectors. The gains ranged from 0.02 percent by the Real
Estate Development Sector to 2.18 percent by the Banks & Financial services
sector. On the other end, the losses ranged from 0.02 percent by the Energy
& Utilities sector to 0.93 percent by the Petrochemical Industries. The
overall market breadth for the day was also positive with 62 advancers against
58 decliners giving it an AD ratio of 1.06, the Financial Transaction House
(FTH) said in its daily market commentary.
"Banks and domestic-focused companies are leading
the market higher, but it is banks that are having the biggest impact on the
index," said a Riyadh trader who asked not to be identified. "The
bank sector has been well bid since Saturday and today (Monday) it broke out
above resistance levels on high volumes."
Al-Rajhi Bank climbed 2 percent, SABB added 2.3 percent
and Riyad Bank gained 2.1 percent.
"Combined bank sector earnings rose
quarter-on-quarter, so it looks like the worst is behind them, while there is
increased competition to lend and borrowing rates for consumers is coming down
and we should start to see some good results toward the end of the year,"
added the trader.
Dubai's Emirates NBD (ENBD) rose 0.8 percent, shrugging
off an early earnings-driven decline.
"When it comes to UAE banks, and especially those
from Dubai, they will have to book huge provisions this quarter and coming
quarters, so it's very difficult to estimate earnings, because there's a lot of
uncertainty and ambiguity about the size of bad loans," added Sarwar.
ENBD's second-quarter profit dropped by more than half,
missing analysts' forecasts, to send the stock toward a four-month low before
it rebounded.
"ENBD numbers are a miss but this is largely priced
in already," said Julian Bruce, EFG-Hermes director of institutional
equity sales.
In Egypt, Orascom Telecom rose 2.2 percent, extending
gains since Algeria on Thursday said talks would soon begin with the Egyptian
company over Djezzy, its Algeria unit. The Egypt index edged up 0.07 percent to
6,116 points.
The Dubai measure rose 0.2 percent to 1,510 points,
while, the Abu Dhabi index edged up 0.03 percent to 2,559 points.
Vodafone Qatar fell 0.6 percent, dropping for a second
day since the regulator said Qatar Telecom's involvement with Virgin Mobile did
not constitute a third operator in the country. Qtel was unchanged.
"Vodafone Qatar has a right to be aggrieved - it all
comes down to the economic terms of the agreement between Qtel and Virgin
Mobile, which we don't yet know," said Irfan Ellam, Al Mal Capital
telecoms analyst.
"Is it purely a licensing agreement and Virgin gets
a license fee or a percentage of revenues? Or will Virgin share a substantial
part of the economics, if so, I would say it would be a third operator."
The Qatar index fell 0.8 percent to 6,915 points.
The Kuwaiti index climbed 0.6 percent to 6,654 points.
- With input from agencies
