Saudi, Dubai bourses rebound

Investors remain jittery about low oil prices

DUBAI, Oct 29, (RTRS): Stock markets in Saudi Arabia and Dubai rebounded on Thursday but closed far off their highs after late bouts of selling, in a sign that investors remain jittery about low oil prices and the prospect of fiscal tightening in the region next year.

The Saudi index, which dropped earlier this week on concern about expected government spending and subsidy cuts, climbed as much as 1.4 percent during the day, bouncing from near technical support at its August low of 6,921 points.

But it closed just 0.1 percent higher at 7,125 points. Blue chip Al-Rajhi Bank climbed 0.5 percent. City Cement Co surged 7.2 percent after its board proposed a 1 riyal per share dividend for the period to September.

Sentiment was buoyed in early trade when Saudi state news agency SPA reported that the government’s advisory Shura Council would consider proposals designed to persuade index compiler MSCI to upgrade Saudi Arabia to emerging market status.

However, the report did not elaborate on the proposals, and MSCI has indicated that any Saudi entry into its emerging markets index, if it happens, would not occur before 2017.

Amonthly Reuters survey of Middle East fund managers, published on Thursday, found them turning negative on balance towards Middle East equities because of the prospect of both fiscal and monetary tightening in the Gulf next year due to the reduction in the region’s oil revenues.

The survey showed the United Arab Emirates remains heavily favoured compared to other markets, because of the diversity of its economy.

But even here, investors do not think the economy can escape chill winds blowing through the Gulf. The Dubai index rose as much as 1.2 percent on Thursday but closed 0.5 percent higher at 3,504 points, holding technical support in the 3,500-point area, which served as a floor in September.

Emaar Malls gained 1.3 percent after it reported a 17 percent rise in third-quarter net profit to 376 million dirhams ($102.4 million); EFG Hermes had forecast the company would make 388 million dirhams.

Abu Dhabi’s index ended flat as food and beverage company Agthia Group jumped 3.9 percent after reporting a 17 percent rise in third-quarter post-tax profit.

National Bank of Abu Dhabi sank 3.3 percent after reporting a third-quarter net profit drop of 3 percent to 1.33 billion dirhams ($362 million); analysts polled by Reuters had forecast an average of 1.45 billion dirhams.

NBAD said its government deposits had dropped by 48 billion dirhams in past 12 months, a sign of low oil prices hurting banking system liquidity.

Qatar’s index rose in early trade but ended 0.3 percent lower despite betterthan-expected earnings by two major companies.

Telecommunications giant Ooredoo surged 2.4 percent. It doubled third-quarter net profit to 756 million riyals ($208 million), handily beating analysts’ forecasts of 416-475 million riyals.

Petrochemical producer Industries Qatar rose 1.2 percent. It posted a 25 per- cent drop in third-quarter net profit to 1.41 billion riyals; analysts had forecast an average of 1.13 billion riyals.

Egypt’s index rose 0.4 percent. But GB Auto , which had risen in recent days on a deal to distribute the cars of China’s Chery, tumbled 4.9 percent after it said production at some of its factories had been halted for 20 days during September and October by delays in receiving supplies. It said operations were now back on track.

Saudi Arabia The index edged up 0.1 percent to 7,125 points.

Dubai The index rose 0.5 percent to 3,504 points.

Abu Dhabi The index was flat at 4,322 points.

Qatar The index fell 0.3 percent to 11,605 points.

Egypt The index rose 0.4 percent to 7,508 points.

Kuwait The index edged up 0.1 percent to 5,775 points.

Oman The index edged down 0.1 percent to 5,928 points.

Bahrain The index edged up 0.1 percent to 1,250 points.