Low liquidity levels weigh on Gulf stocks

Arabian Gulf stock markets were mixed at yesterday’s close, with Abu Dhabi and Dubai ending the day in a narrow range, while the Saudi stock market, the biggest in the region, dropped 0.57 per cent amid weakness in energy and financial stocks.

The Gulf market took little respite from a rise in oil prices and a rebound for Wall Street stocks on Friday and following US President Donald Trump’s announced plans to impose tariffs on steel and aluminium.

“The low liquidity is still affecting the United Arab Emirates stock market and there seems little interest to allocate funds that are sitting on the side,” said Tariq Qaqish, managing director asset management at Menacorp in Dubai.

“We do see stocks trading at attractive levels and close to book values, yet weak investor confidence is keeping investors away,” he said.

The Abu Dhabi index was up 0.2 per cent to 4,604.46 points, with health care and utilities sectors providing it underlying support. Abu Dhabi National Energy rose 1.27 per cent and Gulf Pharmaceutical Industries climbed 8.6 per cent.

The Dubai index was up 0.1 per cent to 3,212.03 points, with Aramex down 2.15 per cent after its board met on Thursday and proposed a full year cash dividend of 156.3 per cent of paid up capital.

Saudi Arabia’s index fell 0.57 per cent to 7,368.85 points, hurt by a 2.03 per cent drop in Saudi Arabian Mining Company, the majority owner of the world’s largest fully integrated aluminium facility.

Banking stocks were also weak, with Al Rajhi Banking & Investment dropping 0.57 per cent and Alinma Bank falling 1.8 per cent. Saudi banks are reeling from news the government has demanded additional Zakat payments from them going back as far as 2002.

NCB Capital, in a report on technicals, said the index had a bearish undertone based on its daily chart, but could find support at 7,250 and 7,150 points.

Kuwait’s stock index was down 0.59 per cent to 6,767.54 points, weighed by Gulf Bank , which was down 2.7 per cent.

Qatar’s market was closed for a bank holiday. Oman’s benchmark was down 0.17 per cent to 5,003.10 points, while Bahrain’s market index was up 0.49 per cent to close at 1,380.2 points. Egypt’s index recovered from early weakness to close 0.49 per cent higher at 15,519 points.

The Kuwait index fell 0.59 per cent to 6,767.54 points.