Dubai's Aramex made its largest
decline for four weeks after its third-quarter earnings fall
short of estimates, weighing on the emirate's index.
Aramex dropped 2.3 percent. The logistics provider's quarterly
profit rose 12 percent to 46.7 million dirhams ($148.4 million),
below a consensus forecast of 48 million dirhams.
Arabtec and Emaar Properties fell 1.3
and 1 percent respectively.
The index slipped 0.5 percent to 1,745 points, its first
decline in three days as volumes drop by 20 percent from Monday.
"The market is drifting back ahead of major earnings news -
Emaar is key because it is the bellwether for both the market
and the real estate sector," said Matthew Wakeman, EFG-Hermes
managing director for cash and equity-linked trading.
Third-quarter earnings will determine whether UAE markets
can hold onto recent gains, says Wakeman. Abu Dhabi hit a
six-month high on Monday, while Dubai is up 17.6 percent since
"The way the market has been trading for the past couple of
months, I'm surprised there hasn't been more severe profit
taking, but there is optimism going forward and earnings will
have to justify this," he said.
Emirates Telecommunications Corp (Etisalat) fell
0.9 percent, failing to advance for a third session in five
since Wednesday's 49-week peak as Abu Dhabi declined.
The benchmark dipped 0.2 percent to 2,826 points.
Kuwait bluechips showed little movement as the country's index fell for a fourth session in six, with investors instead focusing on small cap names.
Zain climbed 2.9 percent, but Kuwait Finance House dropped 1.6 percent and Al Ahli Bank lost 1.5 percent. This trio are the only names among Kuwait's 10 largest stocks to move.
Abyaar Real Estate climbed 3.2 percent to a 20-week high of 32.5 fils, accounting for nearly a sixth of all shares changing hands on the benchmark, as investors target undervalued stocks trading at below 150 fils, said Naser al-Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait.
"Abyaar got rid of about 50 percent of its liabilities after reaching settlements with some of its major customers -- the stock has since surged and investors believe there are other similar stories out there," he added.
Qatar's index rose 0.4 percent to 7,816 points, its fourth straight rise.
Industries Qatar climbed 1 percent and Commercial Bank of Qatar added 1.5 percent.
Galfar Engineering surged to a 51-week high on speculation it could win sub-contracts to help build a new terminal at Muscat airport, while Oman banks also prosper and further gains are forecast as market volumes increase.
Galfar climbed 5.4 percent to its highest level since November 3.
Earlier on Tuesday awarded a 706 million rials ($1.8 billion) contract to a joint venture of Bechtel, the largest US engineering firm, and Oman's Bahwan Contracting to build a terminal at Muscat airport.
"People believe Galfar has a good chance of being recruited as a sub-contractor on the airport project," said Adel Nasr, United Securities brokerage manager.
Bank Muscat climbed 1.2 percent, while National Bank of Oman (NBO) rose 2 percent to a 54-week high. Earlier this month, NBO reported a 16 percent rise in third-quarter profit, falling short of analysts' forecasts.
"NBO's third-quarter results initially had a negative impact, but now people have had more time to digest the numbers they think the increase in provisions coverage shows the bank is clearing its books and are optimistic about its prospects," said Nasr.
The index climbed 0.4 percent to 6,594 points, its sixth gain in seven sessions.
"A lot of institutions are coming back to the market, as are traders and there was excellent buying on the bank sector today," added Nasr. "The index should break 6,700 points very soon."
Saudi Basic Industries Corp (SABIC) eased from Monday's five-month high, but analysts are bullish about the prospects for Saudi petrochemicals as likely US quantitative easing measures boost materials stocks globally.
"There is serious value to be found in Saudi petchems, especially the big names like SABIC and Yansab," said a Riyadh-based trader at an international bank. "SABIC has a big psychological barrier at 95 riyals."
SABIC fell 1.1 percent to 94 riyals, Yanbu National Petrochemical Co's (Yansab) dropped 0.7 percent and Rabigh Refining and Petrochemical Co slipped 0.2 percent.
"We expect the second round of quantitative easing by the Fed to come in November and December, which will be good news for materials stocks globally," said the trader.
This is because the flood of money expected to hit markets will be inflationary, weakening the dollar and pushing up equity and commodity prices due to increased liquidity.
"Bonds are expensive and yields are low and you're not going to earn anything from bank deposits because of low interest rates, while equities are cheap and if you couple that with likely high oil prices because of a weak dollar, then it looks good for petrochemicals," the trader said.
"There is record liquidity sitting on the sidelines and if investors think the market will go up, then they will target the high beta stocks, which tend to make the most aggressive moves."
The US Federal Reserve is expected to buy more long-term assets at its next policy-setting meeting on November 2-3 to try to revive a US economic recovery.
Saudi Arabia's index fell 0.4 percent to 6,305 points. (Reuters)For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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