January 22, 2013 / 3:10 PM / in 5 years

MIDEAST STOCKS-Saudi Mobily rises to 6-yr high; most Gulf mkts up

5 Min Read

DUBAI, Jan 22 (Reuters) - Shares in Etihad Etisalat (Mobily) rallied to their highest in nearly six years on Tuesday, extending gains since its fourth-quarter earnings beat estimates this week, helping lift Saudi Arabia's measure while most other regional markets also gained.

Shares in Mobily rose 2.7 percent to 75 riyals per share, their highest close since April 2006.

The operator said on Saturday net profit grew 11 percent in the fourth quarter and revenue from data and corporate customer will continue to drive growth.

The stock rose for three sessions in the last four, with renewed buying interest as other telecom firms disappointed investors with weak earnings.

"Management's strategy aims to maintain competitiveness and increase network capacity to meet the growing demand from internet users and the business sector," Shrouk Diab, assistant vice-president of research at NBK Capital, said in a note.

He priced Mobily's fair value at 77.90 riyals per share with an 'accumulate' recommendation.

Bargain hunters returned to buy Saudi Telecom. Shares in the telco gained 1 percent, recovering from Monday's seven-week low. The former monopoly reported a 79-percent fall in fourth-quarter profit on Monday due to rising costs and one-off charges at its Indian and South African affiliates.

Zain Saudi climbed 1.9 percent, up 2.5 percent so far in January. Zain's shares recorded heavy losses for the three last years. The indebted telecom operator reported a narrower fourth-quarter loss on Monday but still missed analyst forecasts.

Elsewhere, Egypt's bourse recovered most of Monday's unrest-spurred losses, as non-Arab investors resumed buying.

Cairo's index climbed 0.7 percent, up from Monday's near-three-week low. Non-Arab foreigners were net buyers, while Egyptians were net sellers.

Foreign investors have been the main buyers in Cairo's stocks since late December when the market dropped to July levels on political unrest spurred by President Mohamed Mursi expanding his powers.

In the United Arab Emirates, property developers and banks led declines on Abu Dhabi's bourse.

Shares in National Bank of Abu Dhabi and Abu Dhabi Commercial Bank slipped 1.8 and 1.5 percent respectively.

Aldar Properties dropped 7.5 percent to extend losses since it agreed a merger with Sorouh Real Estate on Monday.

Once the merger is approved by shareholders, Sorouh will delist from the market and shareholders will be paid 1.288 Aldar shares for every Sorouh share. The swap ratio is seen by some analysts as in favour of Sorouh investors.

Sorouh shares, which rallied to their highest close since December 2010 on Monday, fell 2.9 percent to 1.36 dirhams per share.

"The offer values Sorouh at 2.10 dirhams per shares - on the face of it, this is actually quite a good deal for the Sorouh minority shareholder, since our fair value for Sorouh as a stand-alone company amounts to 2.33 dirhams per share," NBK Capital said in a note.

"Given the uncertainties surrounding the still-declining Abu Dhabi real estate market, a discount of just 10 percent to our fair value does not seem unreasonable."

The Abu Dhabi government will own a 37-percent stake in the new firm and will also pay Sorouh 3.2 billion dirhams in exchange for some infrastructure assets and units in its The Gate development.

Abu Dhabi's benchmark slipped 0.9 percent, down for a second session since Sunday's 26-month high.

Dubai's benchmark dipped 0.5 percent to finish at 1,777 points. It is testing long-term technical resistance between 1,778 points - the 2012 high hit in March last year - and an October 2010 peak of 1,793 points.

"The market looks overbought - it reached similar levels around this time last year and stayed there for a while," said Amer Khan, fund manager at Shuaa Asset Management. "From that perspective it can only stay overbought for a little while."

Emaar Properties and Drake & Scull slipped 0.7 and 1.2 percent respectively.

The market trades 110 million shares, compared to Sunday's 445 million shares.

Elsewhere, Qatar's measure climbed 0.2 percent and Oman's benchmark ticked up 0.1 percent to 5,837 points.

Kuwait's index advanced 0.3 percent.

Tuesday's Highlights

Saudi Arabia

* The index gained 0.3 percent to 7,008 points.

Egypt

* The index climbed 0.7 percent to 5,680 points.

Abu Dhabi

* The index declined 0.9 percent to 2,754 points.

Dubai

* The index slipped 0.5 percent to 1,777 points.

Qatar

* The index advanced 0.2 percent to 8,623 points.

Kuwait

* The index climbed 0.3 percent to 6,191 points.

Oman

The index edged up 0.1 percent to 5,837 points.

Bahrain

* The index eased 0.09 percent to 1,073 points.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below