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Sun 25 Jul 2010 10:48 AM

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Emaar shares fall after Q2 results miss forecast

UPDATE 1: Stocks drop 2.4%, while Kuwait's index advanceS 0.5%.

Emaar shares fall after Q2 results miss forecast
MARKET FORCES: Dubais index declined in early trade. (Getty Images)

Dubai's Emaar Properties fell after its second-quarter profit missed forecasts, weighing on the emirate's index.

Emaar dropped 2.4 percent. The developer made a second-quarter net profit of AED802 million, compared with a loss of AED1.29 billion in the same period of last year when it wrote off the book value of its US unit.

Dubai Financial Market fell 2.6 percent. The bourse operator's quarterly profit fell 80 percent as declining trading volumes weighed on earnings.

"The best way to describe Emaar's numbers is 'light' -- they are not necessarily bad," said Ali Khan, managing director and head of brokerage at Arqaam Capital.

"DFM was a bigger miss, but one shouldn't be entirely surprised given what has happened to volumes, which are a key driver for earnings.

"The risk is to the downside and I would expect DFM and Emaar to head lower in the short term."

Dubai's index fell 0.9 percent to 1,516 points.

Shares in Abu Dhabi's Waha Capital rose 1.5 percent, extending gains from the previous three sessions as investors shrugged off a decline in second-quarter net profit.

Waha climbed 1.5 percent, taking its gains to 19 percent since July 20 ahead of the pricing of a bond for one of the firm's units that is expected to raise $1.5 billion.

Waha's second-quarter profit fell to AED5.99 million, down from AED59 million for the corresponding period on 2009.

"The headline number is quite weak, but the stock has rallied on the back of its bond issue, which is significant fundraising for the company," added Khan.

Abu Dhabi's index traded unchanged at 2,551 points.

Oman's bourse rose on low volumes as global markets lifted investors' sentiment and regional corporate earnings broadly met expectations.

"Global markets surged in the past few days as earnings were very good. Here in the GCC results were in line, so there's not really a motivation for the market to surge," said Adel Nasr, United Securities brokerage manager.

The index gained 0.8 percent to 6,164 points.

"At least we're not seeing a negative market anymore, we don't see a rally either in the next few days," Nasr added.

Galfar Engineering rose 3.3 percent and is one of the most active stocks.

Kuwait's index advanced 0.5 percent to 6,612 points. Kuwait Cement Co rose 4.7 percent, but Zain fell 1.7 percent. (Reuters)

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