MIDEAST STOCKS-Emaar boosts Dubai but Ukraine hurts rest of region

Sun Mar 16, 2014 10:24am EDT

Related Topics

* Emaar jumps after hiking dividend, announcing mall IPO plan

* But stock pulls back below major technical resistance

* Dubai's turnover remains moderate

* Ukraine prompts Gulf retail investors to take profits

* Omantel slips after results of first phase of share offer

By Olzhas Auyezov

DUBAI, March 16 (Reuters) - Positive news from Emaar Properties boosted Dubai's bourse on Sunday but the Ukrainian crisis pushed down almost all other stock markets in the Middle East.

Emaar announced plans to sell up to 25 percent of its shopping mall in a public offer expected to raise 8 to 9 billion dirhams ($2.18-$2.45 billion), with proceeds to be "primarily distributed as dividend" to Emaar shareholders. It also hiked its 2013 dividend to the highest since 2007.

The company's shares closed 5.1 percent higher at 9.10 dirhams; Emirates NBD, another Dubai flagship stock, jumped 5.8 percent although trading was very thin. Dubai's main index climbed 2.0 percent.

Emaar's plan, which chairman Mohammed Alabbar said he wanted to carry out "within months", was not unexpected, but it got good reviews from analysts.

EFG-Hermes said Emaar's valuation of its unit, if accepted by the market, would create upside potential of 7 to 13 percent above the investment bank's fair-value estimate of 10.10 dirhams for the stock.

Arqaam Capital, which has an even higher price target for the stock of 12.00 dirhams, said the plan was "highly positive". Emaar may subsequently list other units; Alabbar said its Egyptian unit was being prepared for an initial public offer in that country.

There were signs, however, that Emaar's plan might not be enough to support a sustained rally in the Dubai market from current levels, given the weak global backdrop and the fact that Dubai has already risen so fast in the past 18 months.

Emaar hit an intra-day high of 9.25 dirhams but fell back to close below major chart resistance at 9.16-9.20 dirhams, the highs seen in February and March. Dubai's market turnover was only moderate on Sunday, and many of its most heavily traded shares fell.

After the close on Sunday, Abu Dhabi and the central bank of the United Arab Emirates said they had agreed to refinance $20 billion of debt that was extended to the Dubai government as emergency aid during its financial crisis, and was to come due this year. The news was positive for Dubai but widely expected by the markets.

UKRAINE

Two other UAE property-related names also gained on Sunday. Construction firm Arabtec rose 0.4 percent, while Abu Dhabi's Aldar Properties added 1.0 percent.

Abu Dhabi's index, however, fell 0.5 percent because of soft banking and cement stocks, moving in line with other Gulf markets, which enjoyed no major positive news to offset the gloomy global mood created by the Ukraine crisis.

Although the wealthy Gulf economies are relatively immune to any global instability due to Ukraine, local retail investors have so far reacted to the crisis by taking profits.

"We still have this cloud over the emerging markets of what could happen in Ukraine," said Sebastien Henin, portfolio manager at The National Investor. "We know the emerging markets could come under pressure in the coming days."

In Muscat, Omantel fell 2.2 percent to 1.555 rials after the company said the first half of the Oman government's sale of a 19 percent stake in the firm, a private placement, had been completed and was 1.99 times subscribed.

SUNDAY'S HIGHLIGHTS

DUBAI

* The index gained 2.0 percent to 4,059 points.

ABU DHABI

* The index slid 0.5 percent to 4,732 points.

QATAR

* The index eased 0.1 percent to 11,331 points.

SAUDI ARABIA

* The index slipped 0.1 percent to 9,379 points.

KUWAIT

* The index declined 0.3 percent to 7,434 points.

EGYPT

* The index edged down 0.2 percent to 8,126 points.

OMAN

* The index fell 0.5 percent to 7,026 points.

BAHRAIN

* The index added 0.06 percent to 1,376 points. (Editing by Andrew Torchia)

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