MIDEAST STOCKS-Resilient UAE markets rally; Egypt rises to 3-wk high

DUBAI, Feb. 4 Mon Feb 4, 2013 8:56am EST

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DUBAI, Feb. 4(Reuters) - Investors in the United Arab Emirates shrugged off weak earnings from Aldar Properties and the country's two markets rallied as confidence in local equities supported buying.

Dubai's measure climbed 0.9 percent to head back towards Thursday's 37-month high.

Emaar Properties helped lift the market, gaining 1.7 percent, while Arabtec rose 3.1 percent. Dubai Islamic Bank added 0.9 percent ahead of its earnings, which are due out later on Monday.

Dubai's market jumped 20 percent in 2012 as property prices recovered and lifted sentiment towards the sector's stocks.

"There's no doubt that there has been a lot of capital flow in real estate, especially from foreigners," said Amer Khan, fund manager at Shuaa Asset Management.

"What you're seeing on the ground is being reflected in the market so a pullback would not be too strong. This is long-term money and there's no reason for a reversal."

The market however, is stretched technically and some stocks are overbought, he added.

On neighbouring Abu Dhabi's market, Aldar Properties fell 4.2 percent after its fourth-quarter earnings missed estimates despite a 9.8 percent increase over 2011. Aldar is still up 7.8 percent in 2013, after a 39-percent surge in 2012.

"From an earnings perspective, it's not a phenomenal story but that has been the case for many years so it is not a surprise," Khan added.

The firm's performance dragged Sorouh Real Estate, which is in the process of merging with Aldar, down 2.3 percent. Sorouh has gained 36.5 percent in 2013 on merger hype.

The emirate's index however, closed 0.3 percent higher at a fresh 34-month high as banks supported.

First Gulf Bank gained 1.6 percent and National Bank of Abu Dhabi added 0.5 percent.

In Egypt, the bourse rallied to a three-week high as foreign investors brushed off political unrest and bet domestic strife will ease.

Large-caps supported gains. Telecom Egypt rose 2.5 percent, Orascom Telecom climbed 2.2 percent and Commercial International Bank added 0.8 percent.

Cairo's index advanced 1 percent to its highest close since Jan. 10.

The death toll in Egypt rose to 57 on Sunday in the bloodiest week of President Mohamed Mursi's seven months in power. But non-Arab foreigners were net buyers on Monday, said exchange data, as some bought on hopes the turmoil will ease.

Shares in Orascom Construction Industries (OCI) edged up 0.04 percent. Egyptian construction and fertiliser firm OCI NV, newly listed in the Netherlands, said 93.3 percent of global depository receipt (GDR) holders in parent firm OCI agreed to swap them for OCI NV shares.

OCI will delist after the remaining shareholders accept an offer to exchange their shares to those of OCI NV or sell them for the offered price of 280 pounds in cash.

Investors are moving to other liquid stocks that will lead the market after OCI - the largest by market value - delists.

"Egypt is losing OCI - it's not a good point for the market," said Sebastien Henin, portfolio manager at The National Investor. "Unfortunately there are no IPOs in the pipeline. Liquidity will decrease a little bit."

Investors will look to other stocks such as Orascom Telecom, Telecom Egypt and CBI, he added.

Elsewhere, Saudi Arabia's measure slipped 0.1 percent as petrochemical and banking shares weighed. Saudi Basic Industries Corp (SABIC) and Al Rajhi Bank slipped 0.8 and 0.7 percent respectively.

MONDAY'S HIGHLIGHTS

DUBAI

* The index rose 0.9 percent to 1,865 points.

ABU DHABI

* The index gained 0.3 percent to 2,890 points.

EGYPT

* The index climbed 1 percent to 5,749 points.

SAUDI ARABIA

* The index declined 0.1 percent to 7,025 points.

QATAR

* The index eased 0.01 percent to 8,725 points.

KUWAIT

* The index gained 0.6 percent to 6,310 points.

OMAN

The index advanced 0.5 percent to 5,813 points.

BAHRAIN

* The index eased 0.05 percent to 1,085 points.

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