UPDATE 4: Abu Dhabi's index ADI gives up early gains to slump to a new year-low.
Abu Dhabi's index ADI gave up early gains to slump to a new year-low, tracking losses on the Dubai bourse as banks stocks tumble.
National Bank of Abu Dhabi and First Gulf Bank fell 2.1 and 3 percent respectively. Below-forecast earnings from a clutch of Saudi Arabian lenders has dampened expectations for the Middle East banking sector, analysts say.
"You can't really compare apples with oranges, but if Saudi banks are doing badly and have not faced the same problems as us, what can we expect from UAE banks?" said Ayman el-Saheb, Darahem Financial Brokerage director of operations.
Abu Dhabi's index ADI fell 0.2 percent to 2,707 points.
Dubai's index DFM slumped to a fresh one-month low as investors resume selling after an initial rally, with Dubai's debt problems pushing investors to exit.
"UAE markets are performing strangely," said Amed Hamdi, senior relationship manager at Prime Emirates.
"Most international markets are performing well, oil is looking good and the domestic economy isn't bad, so people are probably waiting for more news about Dubai World debt restructuring. The uncertainty is overhanging the market."
Emaar Properties fell 0.9 percent, Arabtec dropped 0.8 percent and Emirates NBD lost 1.4 percent. Union Properties dropped 2.9 percent to a month low, a day after its chairman told Reuters it was considering selling some of its completed property assets to generate liquidity.
Dubai's index fell 0.3 percent to 1,707 points, its lowest close since Dec. 13.
"Dubai has a long way to go for us to have transparency on its financial and property sectors and until that happens we really can't allocate any funds to its market," says Keith Edwards, head of asset management at Doha-based investment company The First Investor.
Banks lifted Qatar's index QSI to its first gains of the week as above-forecast earnings from Qatar National Bank bolstered expectations for the sector.
QNB climbed 1.4 percent and Al Khaliji Bank rose two percent.
"The government's intervention into banks has strengthened them significantly and put them in a position to post better results than the rest of the Gulf," said Keith Edwards, head of asset management at Doha-based investment company The First Investor.
"(QNB's) growth in deposits was spectacular, that has strengthened the balance sheet and it also saw increased loan growth, while elsewhere in the Gulf the private sector seems to have taken quite a beating."
Qatar Gas Transport Co (Nakilat) also advanced, climbing 0.9 percent.
The index climbed 0.3 percent to 6,855 points, rising slightly from the previous day's six-week low. Volumes fell to a 10-day low.
"Foreign institutions have had a reasonable opinion on Qatar for some time, but it seems they have already built their positions and unless there's a new flow of money into the market they won't increase these," said Edwards.
A late rally enabled Kuwait's index KWSE to edge higher, ending a three-day losing streak, but most bluechips were flat in hesitant trading as investors awaited fourth-quarter earnings.
Gulf Finance House surged 5.9 percent and was the most traded stock, but analysts say there is no fundamental news on the stock, although Kuwait's opaque bourse is renowned as a cauldron of rumours.
Kuwait Finance House fell 1.8 percent and Burgan Bank dropped 3.1 percent.
Agility jumped 4.9 percent, but remained down 41 percent since it was indicted by a US court on fraud charges in late November.
The index edged up 0.04 percent to 6,986 points.
"Nothing exciting is happening today, we are all waiting for the results," said Shakeel Sarwar, Sico investment bank head of asset management.
Bahrain's measure BAX fell 0.3 percent to 1,471 points.
Rallying bank stocks could not prevent Oman's index MSI ending lower for a second day as investors booked profits from Tuesday's 11-week high.
Bank Dhofar climbed 2.2 percent, hitting a 16-month high as its fourth-quarter profit rose four-fold, while Bank Sohar rose 3 percent to highest level since early August 2008 after reporting a rise in full-year profit.
"We're impressed by Bank Sohar, which posted extremely good results. The bank has seen an increase in loans and deposits in 2009," says Adel Nasr, United Securities brokerage manager.
"At Bank Dhofar, it had a good increase in loan activity, deposits grew. Results are in line with our expectations."
Bank Muscat was the main drag on the index, falling 3.3 percent, and fellow heavyweight Oman Telecommunications Co (Omantel) slipped 0.7 percent. These losses weighed on the benchmark, which dropped 0.5 percent to 6,547 percent.
"I believe in a rebound for the (Omani) banking sector in 2010," added Nasr.
"There is room for improvement. Regarding NBO (National Bank of Oman and Bank Muscat, we believe these two banks will be forced to take more provisions in Q4 which will affect results. Q4 for these banks could be a little disappointing."
NBO rose 0.3 percent. (Reuters)