Abu Dhabi banks drag index to 14-month low

Emirates NBD rebounds in Dubai as investors pick up stock on attractive valuations
Abu Dhabi banks drag index to 14-month low
Qatar fell 0.3% to 8,397 points, with investors locking in gains following a five-day rise
By Reuters
Thu 13 Oct 2011 11:23 AM

Abu Dhabi's shares index slumped to 14-month lows with banks
leading the decline while Qatar snapped a five-day winning streak.

National Bank of Abu Dhabi fell 1.5 percent, Abu Dhabi
Commercial Bank slipped 1.8 percent and Investment Bank dropped 5.9 percent.

"Banks will be interesting once the numbers are out
because they will be telling us about the credit quality and loan growth,"
said a trader based in Abu Dhabi. "But it's too risky to be buying banks
before the numbers, unless they go a bit lower."

The index slipped 0.4 percent to 2,478 points, its lowest
close since August 2010.

Muted trade plagued markets of Abu Dhabi and Dubai with
investors little convinced to put money on the line amid the global uncertainty
revolving around Europe's debt woes, with third-quarter earnings season
bringing more caution.

"There's been nothing new on the table recently but
we've had a sentiment swing [in world markets]. Until you see real concrete
proposals, the market will trade on very small margins," the trader added.

Emirates NBD , Dubai's largest stock by market value,
rebounds as investors picked up the stock on attractive valuations.

Its shares rose 1.1 percent, recovering from Wednesday's
27-week low. It had slumped after announcing it would take over struggling
Islamic lender Dubai Bank.

The share index ended little changed, up 0.06 percent to
1,385 points with only 33.7 million shares exchanging hands, against the 50-day
average of 68.5 million shares.

Drake and Scull gained 1.2 percent, accounting for a third
of all shares traded on the index.

Elsewhere, Qatar fell 0.3 percent to 8,397 points, with
investors locking in gains following a five-day rise.

Qatar National Bank fell 0.5 percent, Qatar Navigations shed
1.8 percent and Qatar Islamic Bank slipped 0.5 percent.

Doha Bank, declined 0.5 percent after posted a 9.8 percent
rise in its third-quarter net profit on Wednesday, marginally missing estimates.
The stock halted a six-day rise.

Bucking the trend, Industries Qatar (IQ) rose 0.9 percent
after its third-quarter earnings beat estimates.

Bank Muscat, Oman's largest lender by market value, rose
after reporting a 15.8 percent increase in third-quarter earnings a day
earlier, but it was unable to lift the index which fell to fresh seven week
lows.

The bellwether's shares gained 1.1 percent. The bank's
results topped analysts estimates.

"On back of higher than anticipated credit growth
during 9M FY11, we expect to increase our credit growth estimates going forward
which is driven by lending in big ticket projects and the revival in the
personal credit market in Oman," Kanaga Sundar, Gulf Baader Capital
Markets head of research, said in a research note.

"We would maintain our 'buy' rating on the stock with a
target price of OR0.909." The shares are currently at OR0.67.

The Muscat benchmark eased 0.06 percent to 5,516 points, its
lowest close since Aug 23.

Bank Sohar weighed on the index, falling 0.7 percent while
Renaissance Service slipped 2 percent.

"The market has not been reacting to the positive
earnings flow (but) more of sentiment," Sundar added.

Oman, which has heavy foreign institutional involvement, has
been hard hit by jitters over the euro zone crisis, prompting investors to
liquidate positions.

In Kuwait, the index edged up 0.3 percent to 5,868 points,
trimming 2011 losses to 15.6 percent.

Logistics firm Agility jumped 6.8 percent to its highest
level since May 9.

"The market still thinks they are in talks with large
armies even though Agility denied signing a deal," said a Kuwait-based
trader on condition of anonymity.

The stock hit a four-month high on Sunday on speculation
about a contract. On Tuesday, the firm denied reports that it had won a military
contract worth up to $700m, sending its shares lower.

Other Kuwaiti stocks also surged as local and foreign
investors picked-up battered stocks.

Bayan Investment soared 8.1 percent and Mabanee jumped 3.5
percent.

"Everyone who was in this market is looking for a
bargain. Institutionals are beginning to step back in."

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