Dubai surges; Egypt hits new 45-mth high
MIDEAST STOCK MARKETS
DUBAI: Dubai’s shares surged above a psychologically important level yesterday as heavy retail activity continued amid positive earnings expectations, while other Gulf bourses were mixed and Egypt climbed to a new 45-month high. Dubai’s index rose 1.3 percent to 4,026 points, closing above the 4,000 level for the first time in five years and adding to the bullish retail investor sentiment.
“The market is driven by retail; foreign investors will get more active and chase blue chips but maybe (only) after the MSCI inclusion,” said Sebastien Henin, head of asset management at The National Investor. Index compiler MSCI has upgraded UAE and Qatar to emerging market status, which will be implemented in late May and potentially bring in about $500 million worth of passive funds to each country.
Currently, local investors are trading heavily in small-caps, while anticipating earnings from many of the listed firms in the coming days. Shares in Gulf Navigation surged 14.9 percent, leading trading after the firm posted a fourthquarter net loss of 697.9 million dirhams, but said provisioning for claims against the company amounted to 89 percent of the losses and will be nonrecurring.
Drake and Scull climbed 3.6 percent after its German subsidiary won contracts relating to three water and wastewater treatment plant projects in Europe with a combined value of 166 million dirhams ($45.2 million). Builder Arabtec Holding gained 1.2 percent after a joint venture in which its subsidiary has a stake won a $239 million Abu Dhabi airport contract.
Abu Dhabi’s measure rose 1.5 percent to a new five-year high. In Doha, Commercial Bank of Qatar (CBQ) fell 4.0 percent to its lowest since Dec. 22 after the lender posted a drop in fourth-quarter profit and missed analysts’ forecasts. The bank made a net profit of 300 million riyals ($82.4 million), down 32.9 percent from a year earlier as provisioning for bad loans rose substantially.
Analysts had forecast CBQ’s profit would be 422.3 million riyals. Large-cap Qatar National Bank climbed 2 percent, helping lift the market. The benchmark added 0.5 percent, up for a fourth consecutive session to hit a 66-month high.
Egypt’s benchmark index rose for a fourth straight session, up 0.4 percent to 7,488 points, to its highest level since April 2010. But some players think the rally might be running out of steam.
“Money rotation is taking place - we need another wave of fresh funds or the critical level of 7,500 could become a resistance,” said Mohamed Radwan, director of international sales at Pharos Securities. Investors have been pricing in army chief Field Marshal Abdel Fattah al-Sisi’s run for presidential elections but are waiting for an official announcement, which could further boost the market.—Reuters