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Tue 12 Jul 2011 11:00 AM

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Saudi, UAE, Qatar markets down; Emaar retains interest

Spreading euro debt fears hit world stocks on Tuesday, affecting regional investor confidence

Saudi, UAE, Qatar markets down; Emaar retains interest
(Getty Images)

Saudi Arabia's shares ended lower despite banks posting a strong set of quarterly results as worries about widening Euro zone debt woes hampered sentiment.

The benchmark ended 1.2 percent lower at 6,490 points, its lowest level in July.

World stocks tumbled as officials struggle to contain fears that the Euro zone debt crisis is spreading to Italy and Spain.

In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund.

Petrochemical and banking stocks, the two heavyweights on the index, fEll and investors reduced positions across the board.

SABIC, the largest regional chemicals producer, fell 1.2 percent and the biggest listed lender Al Rajhi Bank shed 1 percent.

Riyadh Bank and Saudi Hollandi Bank bucked the trend, gaining 0.2 and 1 percent respectively.

Riyad Bank's pofits surged 9 percent to 836 million riyals in the second quarter, and Hollandi reported a 5.1 percent rise in quarterly profit.

Dubai's shares declined for a second day, as global markets weighed on regional investor sentiment, with Abu Dhabi and Qatar's bourses also ending lower.

Spreading euro debt fears hit world stocks on Tuesday, affecting regional investor confidence.

Dubai's index declined 1 percent to 1,533 points, hitting a fresh July low.

Most stocks fell with Emaar Properties down 2 percent, leading in volumes.

Analysts polled by Reuters estimate the developer to post a 55.3 percent drop in quarterly net profit.

"Emaar would be interesting in my opinion - the headline number will probably not look pretty due to some write offs, but I would look at the operating side," said Ibrahim Masood, senior investment officer at Mashreq Bank.

Emaar acts as a land lord."

Dubai Islamic Bank shed 1.5 percent, Air Arabia slipped 1.3 percent. Dubai Financial Market eased 0.8 percent.

Large-cap stocks booked losses in Abu Dhabi alongside the index which slipped 0.4 percent to 2,713 points.

National Bank of Abu Dhabi slips 0.9 percent, First Gulf Bank declines 1.4 percent and Aldar Properties falls 3 percent.

Elsewhere, Qatar's index ended 0.9 percent lower at 8,425 points, its lowest close since June 30.

All stocks were down bar one. Vodafone Qatar bucked the trend and gained 0.4 percent, despite analysts' estimates the telecom operator will post a quarterly net loss between QR137m and QR143.5m.

Qatar Telecommunications shed 1.1 percent and Qatar Islamic Bank dropped 1.1 percent.

Masraf Al Rayan fell 2.2 percent, booking the largest losses.

Kuwait's index slumped to a four-month low as investors have growing concerns on regulations imposed recently by Capital Markets Authority.

The benchmark declined 0.3 percent to 6,165 points, its lowest close since March 8.

The newly formed CMA has given a set of new rules to be implemented, including a requirement of separate licences for investment firms to operate their lending and investment businesses.

"A mutual fund can't invest more than 10 percent of its total assets in a single security, which will make it difficult to track the performance relative to the benchmark," said Badr al Ghanim, Global Investment House vice-president of asset management.

"People will have to dump the funds and no one is interested in buying them. Plus there are fines on not following the regulations."

Most large-caps were flat, but mid-caps stocks tumbled with Mabanee falling 1.2 percent and Kuwait International Bank down 1.6 percent.

"We have local politics, pressures from oil prices - if you look at all the factors, they are negative," Badr added.