Du stock slides after $272m rights issue

UPDATE 3: Shares fall 4.1%, weighing on a subdued Dubai index.
Du stock slides after $272m rights issue
MARKET SHARE: Abu Dhabi index declined in early trade. (Getty Images)
By Reuters
Sun 27 Jun 2010 10:39 AM

Du slid after completing a $272m rights issue, weighing on a subdued Dubai index, which ended lower for a third session in four.

Du fell 4.1 percent. Arabtec lost 0.5 percent and Dubai Islamic Bank dipped 1 percent.

Emaar Properties bucked the negative trend to edge 0.3 percent higher. The index ended 0.4 percent lower at 1,533 points.

"I don't think anything major will happen until after Ramadan - everything is drifting and the market should remain range bound," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

Above-forecast second-quarter earnings could lift some stocks, however, Wakeman said.

"We're cautious about how banks will perform, but companies like Emaar should do pretty well," he added. "The Saudi market is now at levels where there is room for an upside reaction to Q2 results."

Saudi Arabia's index fell 0.7 percent to 6,308 points and is down 9 percent since hitting an 18-month high in late April.

Saudi Electricity Co dipped 1.1 percent.

Kuwait bluechip stocks stumbled, weighing on the country's index, which ended lower for a first session in three as nervy investors booked profits ahead of the end of the second quarter.

Zain fell 1.8 percent, slipping for a second session since hitting a four-week closing high on Wednesday. On Sunday, a Kuwaiti newspaper reported Zain was in talks to sell a majority stake to Abu Dhabi-listed Emirates Telecommunications Corp (Etisalat).

"Zain had been going up for the past few days on talk it was looking to sell a stake, but Kuwait sentiment is negative today and so Zain is seeing some selling pressure come in," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.

"Everything is down and volumes are very thin. A lot of investment companies are facing a very challenging time and this spooks the market from time to time, usually when there's a negative global backdrop."

The index dipped 0.8 percent to 6,571 points, with only one of the 20 largest stocks advancing and 11 declining.

Qatar's index fell 0.3 percent to 7,061 points, ending lower for a third session in four since hitting a five-week high on Monday, tracking losses on other regional markets.

Oman's index ended lower for a third session in four, tracking end-of-week declines on global markets, although a Friday surge in oil prices lent some support.

Renaissance Services climbed 0.4 percent after winning a $45 million project, it said in a statement on the bourse website.

Oman Telecommunications Co (Omantel) fell 0.9 percent and Bank Sohar lost 1.4 percent.

"We are following international markets, although the good thing is that despite strong declines globally late last week, most Gulf markets are pretty stable today," said Adel Nasr, United Securities brokerage manager.

"I think this is mainly driven by the surge in oil prices on Friday, which gave some confidence to our markets."

The index slipped 0.4 percent to 6,158 points.

Oil rose more than 3 percent on Friday as a tropical disturbance in the Caribbean Sea looked more likely to develop into a storm and threaten Gulf of Mexico production, but world equities declined on fresh concerns about a global economic recovery. (Reuters)

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