MIDEAST STOCKS-Amlak news may boost Dubai; Iraq a worry for some stocks

DUBAI Sun Aug 10, 2014 1:19am EDT

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DUBAI Aug 10 (Reuters) - Dubai's market may rise on Sunday after local mortgage lender Amlak Finance said all its creditors had approved a plan to restructure its debt, but the conflict in Iraqi Kurdistan may weigh on some individual Gulf shares.

Amlak's debt restructuring talks were the last major hangover from Dubai's property market crash of 2008. Its announcement, made after the market close on Thursday, was not unexpected but was good news in particular for Emaar Properties , which owns 45 percent of Amlak.

Emaar shares rose 1.6 percent on Thursday, possibly in anticipation of the announcement.

Budget carrier Air Arabia may also attract interest after reporting on Saturday that its second-quarter net profit more than doubled to 173 million dirhams ($47.1 million), well above analysts' average forecast of 123 million dirhams.

Dubai contractor Drake & Scull blamed project delays in Saudi Arabia as it posted a 41 percent drop in second quarter profit on Sunday.

The global market environment improved at the end of last week, with the Dow Jones industrial average rising 1.1 percent on Friday after Russia said it had ended military drills near Ukraine.

However, the fighting near the Iraqi Kurdish capital of Arbil may weigh on some individual Gulf stocks. In European markets, Iraqi Kurdistan-focused companies' shares fell sharply on Thursday and Friday as investors reassessed the region's security.

The insurgency in Iraq has not hurt overall market confidence in the Gulf; investors still see no direct impact on the Gulf Cooperation Council, where currency forwards and credit default swaps have not risen in response to Iraq. Limited U.S. air strikes to defend Arbil may eventually help to roll back the insurgency.

But several Gulf stocks with exposure to Iraqi Kurdistan could face fresh pressure in coming days. Abu Dhabi National Energy Co (TAQA) said at the weekend that it had suspended its activity at the Atrush Block in Kurdistan because of the instability.

Dana Gas said last Wednesday that the company's operations in Kurdistan were continuing normally with no security threats so far. It has not issued a fresh statement on the issue since then.

Telecommunications operators Zain and Ooredoo also have major exposure to Iraq via subsidiaries. (Reporting by Andrew Torchia; editing by Matt Smith)

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