UPDATE 8: Property stocks biggest casualties, while Kingdom Holding surges to lift Saudi index.
Dubai's index slipped to a fresh five-week low on slumping volumes, with property-related stocks the biggest casualties in market-wide declines as investors looked to cut positions ahead of quarterly results."The market has pretty much priced in the worst case scenario in terms of results, so when the results come out I wouldn't be surprised if we saw a rebound," said Mohammed Yasin, chief executive of Shuaa Securities.
Emaar Properties fell 3.7 percent and Arabtec fell 3.3 percent to AED2.33. Aabar has dropped 19.4 percent since it agreed to sell a 70 percent stake to Aabar Investments in the form of convertible bonds. These bonds are priced at AED2.30 per share.
Keith Edwards, head of asset management at Doha-based investment company The First Investor, described Aabar's likely acquisition as "not particularly logical" and said the deal suggested significant weakness in Arabtec's balance sheet that investors may have been unaware of.
The index fell 2 percent to 1,674 points, its lowest finish since December 10 and sixth straight decline. Volumes slumped to their lowest level since November 30. Sixteen stocks fell and none rose.
"Liquidity is looking for stocks that will give a good dividend and most of these companies are defensive stocks such as Etisalat and insurance firms, but these are not usually appealing to speculators and don't move the market much," said Shuaa's Yasin.
Abu Dhabi's benchmark declined for a fifth session as nine of the 10 largest stocks declined, tracking losses on the neighbouring Dubai bourse as downbeat global markets and earnings worries weighed.
Emirates Telecommunications Corp (Etisalat) fell 1.4 percent, National Bank of Abu Dhabi dropped 2.1 percent and Abu Dhabi National Energy Co (Taqa) lost 5.6 percent. Dana Gas dropped 4 percent.
"The UAE markets seem correlated to weakness in global markets and the below-forecast earnings from most Saudi companies which have announced so far," said Chamel Fahmy, Beltone Financial regional senior sales trader.
"Technically, most of the graphs also show the markets have further downside potential, so we've seen across the board today on UAE markets"
The index fell 1.2 percent to 2,674 points. Losers outnumbered gainers 20 to four.
Saudi Arabia's index hit a 12-week closing high as financial stocks soared, led by Kingdom Holding, which extended gains since its major shareholder offered a bullish outlook and gave it some Citigroup stock.
Kingdom jumped 9.9 percent, which means it is up 42 percent in four sessions. Prince Alwaleed bin Talal, a prominent Saudi investor in Citigroup and 95-percent owner of Kingdom, on Sunday re-affirmed his support for the bank's chief executive, Vikram Pandit, who he has said faces a make-or-break year.
Riyad Bank rose 6.5 percent. It is up 14 percent in the two sessions since reporting a 72-percent rise in quarterly profit, beating forecasts.
Larger rival, Al-Rajhi Bank fell 0.3 percent after its earnings missed forecasts. SABB rose 5.6 percent, despite its fourth-quarter profit being almost enitrely wiped out by provisions.
The index climbed 1.1 percent to 6,394 points, its highest finish since Oct. 28 and largest one-day gain for more than a month.
Qatar's index made its largest one-day decline for seven weeks as banks tumbled ahead of results following a muted reaction to bumper earnings by Qatar National Bank.
QNB fell 2.3 percent to a seven-week low, Commercial Bank of Qatar plunged 5.2 percent and Doha Bank dropped 4.3 percent.
The index fell 2.4 percent to 6,691 points, its biggest one-day decline and lowest close since December 1 as 19 stocks retreated and none rose.
"Unless companies announce better than expected profits and generous dividends I don't think the market will find it easy to make an uptrend from these levels," said Samer al-Jaouni, General Manager of Middle East Financial Brokerage Co, adding the muted reaction to QNB's fourth-quarter profit jump had spurred selling in other stocks. Kuwait's index bucked a regional downtrend to end higher for a second straight session despite only one of the 10 largest stocks advancing.
Bluechips were subdued, with six of these 10 names ending flat, while three fall. The latter group includes Kuwait Food Co, down 2.7 percent and Agility, down 1.6 percent. National Bank of Kuwait was the sole heavyweight to rise, climbing 1.8 percent.
Trading was concentrated on the smaller cap names in which day traders try to turn a quick profit.
"Trading is range bound -- some of the small cap names come into play from time to time, but the market is directionless," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.
"There's no news flow on the large caps -- bank sector stocks have been stable for some time, but there's no trigger to move them, so activity is shifting to the second and third tier names."
The index climbed 0.4 percent to 7,014 points.
Bahrain's measure also advanced, edging up 0.1 percent to 1,473 points, its sixth gain in seven trading days.
Most banks slid dragging Oman's index to its third straight loss as volumes slumped to a 12-month low.
Bank Dhofar fell 0.5 percent and Bank Sohar lost 1.3 percent as investors booked profits from their respective 16-month highs of Thursday that followed improved earnings from both lenders.
"Though the valuation multiples look higher than the Oman banking sector average (1.5X), we remain positive on the (Bank Sohar) stock for the longer term backed by its strong run rate in deposit addition," Gulf Baader Capital Markets wrote in a research note.
The index fell 0.2 percent to 6,531 points. Less than 3 million shares changed hands, the lowest total since January 13 last year.