| DUBAI, April 2
DUBAI, April 2 Dubai's index rebounded
from a two-month low on Tuesday, although thin trading left
investors unsure whether these gains marked the end of a recent
Most Middle East markets edged higher in lacklustre trade.
Dubai's measure index climbed 1 percent. About 79 million
shares traded, which was 58 percent higher than a day earlier,
but still less than half the 2013 average of 177 million shares.
"The market was very quiet so it's very difficult to say
this marks a change in trend," said Sebastien Henin, portfolio
manager at The National Investor. "Maybe some investors think
the market has fallen enough."
The index has declined in four out of six sessions, reducing
year-to-date gains to 13.6 percent.
It is down 5.3 percent since Feb. 24's 39-month peak and has
broadly followed a similar pattern to 2012 when an early-year
surge gave way to a sustained slump from early March.
But those bald numbers fail to show a crucial difference
this year compared to last, said Henin.
"Last year, it was speculative money coming into small- and
mid-cap stocks that pushed the market higher, but this time it's
only about three or four large stocks - the quality names - that
are responsible for most of the rally," said Henin.
Therefore the market can better hold onto its early-year
gains as these are backed up by company fundamentals, with Emaar
Properties, bank Emirates NBD and telecom
operator du the main drivers of the rally.
Emaar climbed 3 percent and Emirates NBD added 1 percent,
but du fell 0.4 percent. All are up more than 30 percent this
Oman's index rose 0.7 percent to rebound from a
five-week low. It is down 2.7 percent from March 26's 22-month
The recent slump was due to investors booking some
early-year gains as well as many stocks going ex-dividend, said
Adel Nasr, United Securities brokerage manager.
Investors used these cash dividends to buy back stocks at
lower prices, driving Tuesday's rebound.
"It's speculation on first-quarter results," said Nasr. "If
earnings beat expectations I would expect the market to rally to
the end of the year."
Many investors have targeted the likes of OM Invest
and Oman National Investment Corp Holding
(ONIC), because these companies invest in Gulf equities and so
should benefit from a broadly positive regional trend this year.
OM Invest and ONIC climbed 5.5 and 3.1 percent respectively.
Saudi Arabia's index rose for a sixth session in
eight, but will remain in a sideways range as investors are
unsure how best to profit from the country's growing economy,
which is forecast to expand 4 percent in 2013.
"Saudi has one of the best stories from a macroeconomic
perspective, but taking a position on that is trickier because
the largest sector - petrochemicals - is not really related to
the domestic economy," said Henin. "People are hunting for
That would normally make consumer stocks a target, but these
have already rallied, said Henin.
Investors are also wary of banking stocks, Saudi's other
heavyweight sector, due to worries that provisions and tight net
interest margins will constrain profit growth.
Telecoms is attracting little interest - No.2 operator
Mobily is near a six-year high and former monopoly
Saudi Telecom Co has been making negative headlines
after a second chief executive quit in less than a year last
month and its fourth-quarter profit fell 79 percent.
Egypt's main share index fell 0.4 percent, its
third straight decline, to slump to a 16-week low.
"Bearish momentum is slowing down," wrote Pharos brokerage.
* The index fell 0.4 percent to 5,037 points.
* The index climbed 0.2 percent to 7,173 points.
* The index gained 0.3 percent to 6,760 points.
* The index rose 1 percent to 1,843 points.
* The index fell 0.04 percent to 3,007 points.
* The index climbed 0.6 percent to 8,549 points.
The index rose 0.7 percent to 6,010 points.
* The index climbed 0.07 percent to 1,092 points.