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Tue 2 Mar 2010 10:47 AM

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Mobily rises after analyst upgrade; Saudi up

UPDATE 7: Dubai ends lower for first session in four after failing to hold above key resistance level.

Etihad Etisalat (Mobily) rose after a bullish analyst report, helping Saudi Arabia's index TASI advance for the second session in six.

Mobily climbed 1.7 percent. Riyad Capital upgraded the stock to "strong buy", setting a price target of 55 riyals.

"Mobily is positioned to make inroads in the higher value business segment," Riyad Capital wrote in a research note.

The index rose 0.3 percent to 6,445 points in slow trading, with less than 100 million shares changing hands for the seventh straight session.

Dubai's index DFM ended lower for the first session in four after failing to hold above a key resistance level, with traders looking to technical analysis in the absence of fundamental news. Arabtec fell 2.3 percent ahead of the expected release of its quarterly earnings on either Tuesday or Wednesday. Deyaar dropped 2.1 percent and Ajman Bank slid 2.4 percent.

The index fell 0.5 percent to 1,588 points. It broke, but then failed to above 1,600.

"People are waiting for Dubai World's announcement," saids Ahmed Hamdi, Senior relationship manager at Prime Emirates.

"People need to know how Dubai's issues will be resolved before putting money in stocks, especially if it is investment, rather than speculation - most of the activity over past six months has been pure speculation. Investors are really uncertain about the future."

In November, government-owned Dubai World asked for a standstill as it tries to restructure multi-billion dollar debts, with an announcement expected in March.

Emirates Telecommunications Corp (Etisalat) helped Abu Dhabi's index ADI end flat after the heavyweight climbed 0.8 percent. The stock was up 7.6 percent since Feb. 14 as investors bought ahead of its proposed half-year 60 percent cash dividend.

The index edged up 0.01 percent to 2,725 points, a week high.

Bluechips rallied, helping Kuwait's index KWSE end higher after a five-day holiday.

Zain climbed 3.1 percent and Kuwait Finance House added 1.7 percent. Zain was up 22 percent since it said it had entered exclusive talks with India's Bharti Telecom to sell some of its African assets in a $9 bn deal.

"There are two issues with Zain - Bharti must raise the money to fund a deal, while the due diligence deadline is March 25," said Naser Al Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait.

These uncertainties mean the deal is far from a foregone conclusion, but investors are betting it will go through.

Commercial Bank of Kuwait was the standout performer, rising 4.3 percent, although only 30,000 shares change hands.

CBK' shares are under majority control of its major shareholder, Nafisi says, making the price easier to control.

The index rose 0.4 percent to 7,406 points.

Bahrain's measure BAX fell 0.6 percent to 1,504 points.

Industries Qatar bounced back after Monday's earnings-driven dropped and Commercial Bank of Qatar (CBQ) also rallied to help Doha's index QSI end higher for a third session in four.

IQ climbed 0.7 percent. It slumped to a four-week low on Monday after its earnings missed forecasts.

CBQ rose 0.9 percent, but investors cashed in recent gains in Barwa Real Estate, which dropped 1.3 percent.

The index climbed 0.1 percent to 6,848 points.

Oman Telecommunications Co (Omantel) rose as investors buy ahead of its dividend payout, helping Oman's index end a three-session losing streak, although gains are muted. Omantel rose 1 percent. It has proposed a 100 percent cash dividend, which has been well received by investors. Bank Sohar adds 2.6 percent. Renaissance Services fell 0.3 percent, taking its losses to 4 percent since it proposed a 12 percent cash dividend early Monday.

"People are waiting for dividends to be declared," says Shailendra Singh, investment manager at Al Shurooq Securities.

"The market went up on anticipated dividends, driven by companies that have proposed good dividends such as banks and cement companies, while the likes of Renaissance has fallen after offering a poor dividend."

Companies are expected to hold annual meeting in the second half of March to ratify proposed dividends.

The index edged up 0.1 percent to 6,689 points. It is down 1.6 percent, since hitting a 15-month closing high on Feb. 21.

"The market is trading in a narrow band because it has already had a good run up - there won't be a big correction," says Singh. (Reuters)

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