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Sat 10 Jan 2009 01:08 PM

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Dubai market inches higher with rises in banking

UPDATE 6: Most Gulf exchanges close lower but Saudi joins Dubai in closing higher.

Dubai's main index inched higher in late-session buying on thin volumes, while Abu Dhabi's measure extended declines on profit-taking among banking and property shares.

In Dubai, Emirates NBD gained 4.93 percent and Dubai Islamic Bank 4.1 percent. The benchmark added 0.39 percent to close at 1,735 points, having hit as low as 1,686 points earlier.

"The reversal in the index was due to around five or six shares with low volumes. Because volumes are low, some minor transactions could move the market," said Alfred Fayek, director in the GCC institutional desk at EFG-Hermes.

Abu Dhabi's index fell 1.06 percent, closing lower for a third trading day. First Gulf Bank fell 5.57 percent, having risen 8.7 percent this month. Sorouh Real Estate retreated 8.03 percent, having rallied almost 26 percent this month.

Markets in Kuwait, Qatar and Bahrain closed lower as weak expectations for corporate earnings and low oil prices continued to dampen sentiment in most Gulf Arab bourses.

Kuwait's measure, which has closed lower in all but one of the last 11 trading days, fell 0.99 percent to 7,298 points. Global Investment House fell 7.04 percent, as blue chips including National Bank of Kuwait shed 3.39 percent.

Oil prices have tumbled more than $100 a barrel since July to just above $40 a barrel on Friday, which has weighed on investor sentiment in the world's top oil-exporting region.

Qatar's benchmark declined 1.36 percent to 6,344 points as Industries Qatar fell 2.21 percent. In Bahrain, Albaraka Banking Group fell 9.72 percent, pushing the index down 1.73 percent to 1,749 points.

However, Oman's main index ended higher as investors snapped up stocks on expectations of strong fourth-quarter earnings bucking regional trends.

The measure, which fell almost 40 percent last year, rose 0.46 percent to 5,452 points. Oman Telecommunications Co gained 3.91 percent and National Bank of Oman rose 1.93 percent.

Two analysts in a Reuters net profit survey last month said they expected Omantel's quarterly profit to rise between 14.7 and 21.5 percent.

"As long as oil prices are around $40, Gulf markets will not react well," said Mohamed Abu Ghosh, an analyst at Ahli Bank in Doha.

"We've seen a very strong correlation between oil prices and GCC markets performance over all."

Shakeel Sarwar, head of Asset Management at SICO Investment Bank added: "The market was up 10-12 percent from its lows last year, so one reason for this decline is profit-taking. The trigger is the fall in the oil price over the weekend. A combination of the two saw the decline today."

Saudi Arabia's index closed higher, led by banks as Saudi Arabian Fertilizers Co (Safco) fell after missing analysts' forecasts with a 28-percent drop in fourth-quarter profit.

SABB bank gained 2.03 percent, lifting the index 0.1 percent to 5,165 points.

Safco, controlled by Saudi Basic Industries Corp (SABIC), dropped 2.65 percent. SABIC shed 0.89 percent. (Reuters)

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