Abu Dhabi's Aldar Properties slid 4.6 percent after the
indebted developer said it wants to issue a convertible bond and sell assets.
The Abu Dhabi index fell 0.5 percent 2,740 points.
Dubai builder Arabtec fell 3 percent to a two-week low.
It is planning a $108.5 million rights issue and $150 million convertible bond.
"These are signals that both companies have a need
for cash and a rights issue or convertible bond will both be dilutive to
minority shareholders," said Mohammed Yasin, CAPM Investment chief
investment officer.
"The UAE property market is still going through a
correction and companies can't find any other source of funding - they can't
sell new projects or borrow more money from banks.
"So the only option is to go to shareholders, either
old shareholders through a rights issue or new shareholders through a
convertible bond."
"Aldar and Arabtec affected the whole UAE market
today, but I doubt this will affect other stocks in the longer term," said
Mohamed Khaled, Prime Emirates relationship manager.
Qatar National Bank rose 2.6 percent to a record high
after its quarterly profit beat forecasts.
"QNB probably offers the best growth story among
Qatar banks because of its close links to the government - it will probably be
able to achieve the highest loan growth and deposit growth going forward,"
said Jaap Meijer, AlembicHC senior analyst.
Qatar's sovereign fund will buy further stakes in local
banks in the first-quarter.
"In terms of earnings, this will be dilutive, but
this situation can be reversed if banks are able to grow even faster as a
result of having a better capital position," added Meijer.
Qatar's index rose 1.6 percent to 9,138 points - a 27-month
high.
Saudi Arabia's Tadawul All-Share Index (TASI) climbed 0.5
percent to 6,701.28 points as Saudi Basic Industries Corp. (SABIC) added 1.7
percent.
The sector activity for the day was mostly positive with
12 out 15 with gains ranging from 0.10 percent by the Building &
Construction sector to 1.36 percent by the Petrochemical Industries sector. On
the other hand the losing sectors were the Retail sector with 0.09 percent, the
Banks & Financial Services sector with 0.12 percent and the Agriculture
& Food Industries sector with 0.24 percent. The overall market breadth for
the day was positive with 97 advancers against 26 decliners giving it an AD
ratio of 3.73, the Financial Transaction House (FTH) said in its daily market
commentary.
The stock market turnover reached SR3.13 billion on
Tuesday.
The Kuwaiti index edged up 0.05 percent to 6,951 points.
The Omani index edged up 0.02 percent to 6,919 points. The Bahraini measure
dropped 0.3 percent to 1,425 points.
- With input from agencies
