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Wed 28 Jan 2009 11:11 AM

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UAE bourses end high; Oman falls 5.6%

UPDATE 2: Oman's MSI reacts to National Bank of Oman's dismal Q4 numbers.

Abu Dhabi ADI ended 1.54 percent higher, lifted by gains in financials and index heavyweight Etisalat.

Financials benefit after First Gulf Bank reported an eight percent rise in quarterly profit, pushing shares up 2.43 percent.

Dubai's measure DFMGI ended up 0.24 percent with Qatars’s QSI just below par, down 0.04 percent.

Oman's index MSI ended 5.6 percent lower after National Bank of Oman reported a 33 percent drop in fourth quarter profit and said Gulf Arab states were in for a challenging 2009, sending its shares down 9.8 percent.

Bank Muscat ended 9.95 percent lower with Oman International Bank down 9.84 percent.

Saudi Arabia's index TASI ended just below par, down 0.15 percent at 4789 points, as shares in Arab National Bank and Saudi Fransi bank weighed.

Investors feared some banks may need to set aside heavy provisions for the fourth quarter to cover falling asset prices and loan values, and to ensure a steady footing going into another challenging year.

"Many banks will try to avoid bad results in 2009 by heavily provisioning in the fourth quarter," said Hamood Abdulla Al Yasi, managing director at Emirates International Securities.

Arab National Bank ended down 2.99 percent, Saudi Fransi down 1.5 percent.

Qatar's index QSI was little changed, with Qatar Islamic Bank, up 1.27 percent helping to offset weakness in Qatar National Bank, down three percent as sentiment in the financial sector turned cautious.

"There's a lot of short-term trading," said one Gulf economist who declined to be named.

"The banks are showing falling profits," the economist said. "People know that it's going to be a challenging year in 2009."

UAE banking shares gained after First Gulf Bank reported an eight percent rise in quarterly profit on Tuesday as investor confidence in the strength of the sector returns, analysts at ING said.

"We expect a very positive impact on the stock that might also extend to a wider range of UAE banking stocks," the bank said in a research note to clients.

FGB shares rise 3.4 percent once trading resumed on Wednesday pending the conclusion of a board meeting.

In a separate note, UBS said FGB showed "no chinks in the armour," and kept its "neutral" rating on the stock.

Shares in Commercial Bank of Dubai rose five percent and Emirates NBD rose 2.7 percent. The Dubai index DFMGI rose 1.21 percent to 1,551 points. (Reuters)


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