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Wed 31 Oct 2012 11:53 AM

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Gulf seeks catalyst; Abu Dhabi banks in focus

Gulf markets are likely to see muted trade amid a thin local news flow, as investors wait for global cues with US markets

Gulf seeks catalyst; Abu Dhabi banks in focus
Gulf markets are likely to see muted trade amid a thin local news flow, as investors wait for global cues with US markets.

Gulf markets are likely to see muted trade amid a thin local news flow, as investors wait for global cues with US markets expected to reopen later on Wednesday after a two-day storm-forced shutdown.

Abu Dhabi banks will be in focus. National Bank of Abu Dhabi , the largest lender by market value in the United Arab Emirates, is eyeing a presence in South Korea as it seeks to expand its footprint in Asia.

Abu Dhabi Islamic Bank is planning to boost its capital through the sale of a sharia-compliant debt instrument, in what would be a rare method by a regional lender to boost its core capital ratios.

Shares in Abu Dhabi-listed Dana Gas tumbled on Tuesday to their lowest finish since October 4 after sources familiar with the matter said the firm would not repay its sukuk on maturity.

"People were looking for a last-minute solution and when that didn't come, they preferred to dump the stock," says Marwan Shurrab, vice-president and chief trader at Gulfmena Investments. "The main question is the company's ability to repay or restructure the sukuk. Until then, pressure will continue on its stock."

Elsewhere, Gulf Bank, Kuwait's fourth-largest lender by market value, reported a 5.6 percent rise in third-quarter net profit to 9.6 million dinars, the bank said in a bourse filing on Tuesday.

Arqaam Capital had forecasted Gulf Bank would make a KWD10m profit in the third quarter.

In Doha, the board of Qatar Insurance has approved the sale of shares worth QAR488.6m (US$134.2m) to state fund Qatar Holding, the insurer said in a bourse filing on Tuesday.

Asian shares rose as risk appetite recovered after European equities and the euro firmed overnight while US financial markets looked set to reopen following their storm-forced shutdown.

"[The global lead] is still very unpredictable - we will have to wait and see how the US market reacts today. But Europe's gains yesterday should support," Shurrab adds.