Bullish sen­ti­ment lifts Saudi as Egypt cools

Kuwait Times - - BUSINESS -

DUBAI: Ma­jor stock mar­kets in the Gulf rose yes­ter­day with Saudi Ara­bia out­per­form­ing it peers, con­tin­u­ing to climb on the back of up­beat in­vestor sen­ti­ment fol­low­ing the mam­moth in­ter­na­tional bond sale at the end of last week. Egypt’s in­dex slipped on profit tak­ing.

Riyadh’s in­dex added a fur­ther 1.6 per­cent, tak­ing its gains since Wed­nes­day to 5.1 per­cent as a lit­tle over 80 per­cent of the traded shares rose. Banks continued their climb with Saudi Hol­landi Bank gain­ing 3.4 per­cent. At the end of last week bank shares ral­lied after the king­dom con­ducted a $17.5 bil­lion in­ter­na­tional bond sale with suc­cess.

In­vestor op­ti­mism has been buoyed de­spite some weak quar­terly re­sults. About three-quar­ters of Saudi’s listed com­pa­nies have so far re­ported, with gen­er­ally lower earn­ings and a few com­pa­nies miss­ing an­a­lysts’ es­ti­mates by a wide mar­gin. “There has been a string of pos­i­tive events that have helped re­vive op­ti­mism to­wards Saudi shares, namely be­cause of the suc­cess­ful bond sale, pay­ment by gov­ern­ment to con­struc­tion sec­tor and rel­a­tively sup­port­ive oil prices,” said Ku­nal Damle, head of bro­ker­age in­sti­tu­tional sales at SICO Bahrain.

Val­u­a­tions at cur­rent lev­els will en­cour­age in­vestors fur­ther, an­other fac­tor Damle be­lieves is un­der­ly­ing the mar­ket rally over the last two ses­sions. The bank­ing sub-in­dex is trad­ing at a price-toearn­ings of 8 times, ac­cord­ing to Thom­son Reuters data, a dis­count to its five year av­er­age.

Dar Al-Arkan, the most traded stock yes­ter­day, soared by their 10 per­cent daily limit after it re­ported a 21.4 per­cent rise in third-quar­ter net profit to 112.5 mil­lion riyals ($30.0 mil­lion), dou­ble the fore­cast by an­a­lysts at NCB Cap­i­tal. The com­pany at­trib­uted the rise to higher rev­enues from prop­erty sales and lower op­er­at­ing ex­penses, such as pay­roll and con­sul­tancy fees.

An­a­lysts at NCB Cap­i­tal said the sur­prise came from higher than ex­pected land sales of 570 mil­lion riyals ver­sus their es­ti­mate of 390 mil­lion riyals. Su­per­mar­ket op­er­a­tor Al-Othaim jumped 4.5 per­cent after the com­pany re­ported a bet­ter than ex­pected thirdquar­ter net in­come of 36.64 mil­lion riyals, higher than NCB Cap­i­tal’s es­ti­mate of 29.3 mil­lion riyals.

An­a­lysts at NCB said in a note lower than ex­pected op­er­at­ing ex­pense and higher in­come from its as­so­ciate were the key driv­ers for the earn­ing’s com­ing ahead of their fore­cast.

UAE, EGYPT

Dubai’s main in­dex added 0.5 per­cent as the largest listed de­vel­oper Emaar Prop­er­ties, which has yet to pub­lish its third-quar­ter net in­come, rose 2.6 per­cent. But DXB En­ter­tain­ments, pared gains and fell 0.6 per­cent end­ing its three ses­sion of strong gains. Its shares have out­per­formed over the last sev­eral days in an­tic­i­pa­tion of the open­ing of its theme park at the end of the month.

Blue chips lent the main sup­port to Abu Dhabi’s in­dex , which added 0.1 per­cent. Al­dar Prop­er­ties ad­vanced 1.1 per­cent and Na­tional Bank of Abu Dhabi, which an­nounced yes­ter­day its share­hold­ers and those of First Gulf Bank will both meet on Dec. 7 to ap­prove the merg­ing of the two, climbed 2.3 per­cent. Egypt’s in­dex of the 30 most valu­able shares dipped 0.04 per­cent as two-thirds of the stocks de­clined as some of the best per­form­ing shares on Thurs­day gave back some gains. Oras­com Tele­com, the most traded share, pulled back 3.6 per­cent.

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