MIDEAST STOCKS-Developer Emaar drags down Dubai after Q4 miss

DUBAI Sun Feb 3, 2013 9:07am EST

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DUBAI Jan 31 (Reuters) - Shares in Dubai's Emaar Properties dropped nearly 4 percent on Sunday after its fourth quarter earnings results missed analysts' estimates, dragging down the emirate's bourse from a 37-month peak.

Emaar shares fell 3.7 percent but are still up 25 percent in 2013. The stock had rallied ahead of earnings on investor optimism about a recovery in Dubai's beleaguered property sector.

The developer posted a 28-percent drop in fourth-quarter profit as costs soared amid the revival of stalled projects in the emirate.

"Emaar is still cheap in my view but after the rally we saw in January, the stock has to take a breather," said Reda Gomaa, portfolio manager at Mashreq. "Revenues are strong but margins were significantly lower."

Gomaa said the stock is unlikely to see any major further gains until Emaar announces its dividend later in the quarter.

Market participants expect a cash dividend of 0.1 dirhams. Anything above that will boost the shares, Gomaa added.

Heavyweight Emirates NBD bank also weighed on the index, falling 2.1 percent. The bank said it will start repaying part of the 12.6 billion dirhams ($3.43 billion) it received from the government in 2008.

Dubai's benchmark dropped 2.1 percent, down from Thursday's 37-month high, in its largest one-day fall since March 7.

Abu Dhabi's measure ended little changed, easing 0.03 percent from Thursday's near three-year high.

In Egypt, the index rose 1.6 percent, up for a third session after slumping to a four-week low last Tuesday.

At least one protester was shot dead and dozens wounded on Friday when riot police clashed with demonstrators demanding the overthrow of President Mohamed Mursi. Eight days of protests have killed nearly 60 people.

A video of one demonstrator stripped naked, dragged across the ground and beaten with truncheons by helmeted riot police has fired Egyptians to a new level of outrage.

"There is a famous saying - buy when there is blood in the streets - that's exactly what we are seeing in Egypt," said Sebastien Henin, portfolio manager at The National Investor.

"If you are a risk taker, it makes sense to have a small exposure to Egypt these days. Even if the situation is becoming shaky from a political point of view, a lot of investors are betting that things will improve."

Commercial Bank International rises 1.4 percent, Orascom Construction Industries gains 1.2 percent and Talaat Mostafa Group adds 3.3 percent.

Elsewhere, Saudi Arabia's bourse slipped 0.3 percent, down from Saturday's near three-week high as petrochemical stocks weighed.

Bellwether Saudi Basic Industries Corp (SABIC) declined 0.3 percent to 93.8 riyals. The world's largest chemicals firm said a workers strike at its unit SABIC Europe Chemicals Geleen's plant in the Netherlands has cut production.

SABIC said it did not know what impact the strike would have on profits or production.

"At the extreme, this could imply a shutdown or reduction in production operations in the Netherlands if it was unable to come to terms with the employee union," Riyad Capital said in a note. It has a 'buy' recommendation on the stock, with a price target of 120 riyals.

Saudi Kayan Petrochemical shed 0.4 percent and Rabigh Refining and Petrochemical slipped 1.1 percent.

SUNDAY'S HIGHLIGHTS

DUBAI

* The index fell 2.1 percent to 1,848 points.

ABU DHABI

* The index eased 0.03 percent to 2,881 points.

EGYPT

* The index rose 1.6 percent to 5,694 points.

SAUDI ARABIA

* The index declined 0.3 percent to 7,033 points.

QATAR

* The index edged up 0.02 percent to 8,726 points.

KUWAIT

* The index gained 0.5 percent to 6,275 points.

OMAN

The index slipped 0.3 percent to 5,785 points.

BAHRAIN

* The index ticked up 0.08 percent to 1,086 points.

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