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UAE, Saudi markets claw back some losses

Markets in Saudi Arabia, Dubai and Abu Dhabi all finished higher on Tuesday, breaking a disastrous run that saw billions wiped off balance sheets over the past week.

However, elsewhere in the Gulf there was more bad news, with Qatar, Bahrain, Kuwait and Oman all slipping.
Dubai followed a rebound in equity markets across Europe and Asia to recover some of the losses posted on Monday, when the index suffered its largest single-day drop in over a month.

Dubai Islamic Bank and property developer Deyaar shot up 5.21% and 5.7% respectively to help the benchmark index up 1.2% to close on 5,467.74 points.

Monday’s panicked selloff was spurred by fears of a global slowdown and reports of impending regulatory reform aimed at capping the limit for margin trading.

Reports that the Emirates Securities and Commodities Authority (Esca) plans to introduce measures to cap margin trading at 50% as early as April led to lower volumes and dissatisfaction among investors.

“Regulators need to introduce a lot more facilities in the market that will allow clients to inject capital again,” Ahmad Elrawy, head of trading at Dubai Financial Brokerage told ArabianBusiness.com.

“Investors are generally not satisfied with their returns in this market," Elrawy said, predicting the Dubai market would continue to fall in the short-term in spite of Tuesday’s higher close.

Abu Dhabi’s index also rose, helped by a strong performance from telecom Etisalat, which soared 3.83% after its shareholders approved a cash dividend and bonus shares for the second half of 2007.

Value investors scouring the markets for beaten down stocks had plenty to choose from after last week’s hammering and confident buyers brought much needed liquidity to the market.

“Yesterday the drop was so sharp and was exaggerated due to low volumes which trigger a decline,” Chahir Hosni, dealing room manager at EFG-Hermes, told newswire Reuters.

“So today, prices have been really attractive and you see bargain-hunters accumulating stock."

Saudi’s main index also broke what has been a horrendous run of losses, finishing the day in positive territory after finishing in the red in eight of the previous nine trading days.

Saudi Basic Industries Corporation (Sabic) and Al-Rajhi Bank led the charge, up 1.28% and 0.86% respectively, helping the main index up 1.45% to 9,506.9 points, its biggest single-day gain since March 4.

Kuwait fell for a third straight day since it reached a record high last week. Mobile telecom Zain and logistics giant Agility plummeted 3% and 4.69% respectively to drag the benchmark index down 0.42% to 14,319.40 points.

Qatar posted the largest fall of the regional indexes, with shares of Doha Bank freefalling almost 10% after a disappointing dividends announcement. Qatar Islamic Bank also fell, weighing on the index which finished the day down 2.08% on 9,511.52 points.

Oman and Bahrain both finished marginally lower, with markets in Muscat and Manama dipping 0.36% and 0.27% respectively.

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