Gulf stocks trade flat waiting for earnings

Most Arabian Gulf markets closed in positive territory yesterday but trading volumes were thin as investors awaited company results reporting that will begin this week.

In Egypt, the index gained 1.2 per cent, but Global Telecom plunged 7 per cent after announcing earlier yesterday its plan to convert outstanding shareholder loans of $370.6 million plus accrued interest into equity. Global Telecom said its financial position and cash flow would remain unchanged after the conversion, given this is a non-cash transaction.

But the stock took a hit, plunging to a month’s low. Earlier this month the company also said it planned to raise capital via a rights issue of 11.2 billion Egyptian pounds (Dh2.30bn), corresponding to the issuance of 19.3 billion new shares with a par value of 0.58 Egyptian pounds.

In the Gulf, most major markets closed slightly up, with the Saudi exchange leading the gains. The index rose 1 percent, lifted by a 5.5 percent surge by Al Tayyar Travel Group, a 2 per cent gain by heavyweight Al Rajhi Banking & Investment and a 10 per cent jump by Saudi Cable Company.

The latter, a loss-making electrical wires manufacturer, has been gaining value since December 26, when it leapt after reaching a final settlement agreement with commercial creditors on 313.6 million riyals in loans.

The Abu Dhabi Securities Exchange closed flat, up by a negligable 0.1 per cent.

The Dubai index closed in negative territory, shedding 0.3 per cent, reversing gains made in early trading. Union Properties lost 1.9 per cent, weighing on the index as it was the stock registering the highest trading volume.

Dubai’s port operator DP World, which is listed on Nasdaq Dubai, edged up 0.1 per cent, after saying on Sunday it had agreed to acquire a 71.3 per cent stake in Chile’s Puertos y Logistica (Pulogsa) from Minera Valparaiso and other shareholders associated with the Matte Group.

DP World said it would offer $502 million for 100 per cent equity ownership and that it expected the deal to be “earnings accretive in the first full year of consolidation” and would be financed from existing balance resources.

The Kuwait exchange closed 0.4 per cent up yesterday