* Investors await more news from Dubai's Arabtec
* Trading volumes weak around Gulf
* But Kuwait small-caps recover after slump
* Other Gulf markets move little ahead of Ramadan
* Qatar blue chips rebound after hit from FTSE index changes
By Olzhas Auyezov
DUBAI, June 22 Uncertainty about the future of
Dubai contractor Arabtec Holding put local investors
in a bearish mood on Sunday, affecting the whole market, which
ended a three-day gaining streak. Most Gulf markets moved little
on declining volumes.
Shares in Arabtec tumbled 9.9 percent after failing to hold
on to early-session gains and were among the main drags on the
Dubai benchmark, which fell 2.3 percent after going up
as much as 1.0 percent shortly after the opening.
Arabtec shares have plunged 43 percent this month after one
of its main shareholders, Abu Dhabi state fund Aabar
Investments, reduced its stake in the firm to 18.94 percent from
The shares became more stable after Arabtec chief executive
Hasan Ismaik resigned last week and an Aabar-linked executive
became acting CEO, but analysts say investors are still waiting
for a clear message from the fund on its strategy.
"There is a feeling that the news on Arabtec last week
wasn't the final episode," said Sanyalak Manibhandu, manager of
research at NBAD Securities in Abu Dhabi.
"A lot investors expect to see more newsflow from the
company. And until the uncertainty around Arabtec is resolved,
it might have a negative impact of on the rest of DFM (Dubai
Property and construction stocks, which dominate the
emirate's stock market, were down on Sunday. Emaar Properties
fell 3.4 percent, Deyaar Development slid
2.5 percent and Union Properties fell 1.3 percent.
Shares in construction firm Drake and Scull, which
surged last week on news that it would issue a convertible bond
to a strategic investor, also retreated after touching an
all-time high of 1.97 dirhams. They slid 3.2 percent to 1.84
Abu Dhabi's bourse closed flat on a mixed performance
by blue chips in low volume. National Bank of Abu Dhabi
and Aldar Properties fell 1.7 and 2.0
percent respectively, while First Gulf Bank rose 1.6
percent and Abu Dhabi Commercial Bank added 1.5
The Muslim holy month of Ramadan, which is traditionally a
period of lower market activity, will begin next week and this
may already be affecting bourses across the region.
"We always expect traded value to go down just ahead of
Ramadan," Manibhandu said. "But this year Ramadan falls during
second-quarter earnings announcements, so trading could pick up.
People do trade during Ramadan if there is something to trade
Heavy fighting in Iraq is another factor deterring some
investors from opening new positions. Shares in Abu Dhabi
National Energy Company and Dana Gas, both
of which have operations in Iraq's Kurdistan region, fell 0.9
and 1.3 percent. They have so far not announced any damage to
Mobile phone operator Zain Kuwait, which is also
heavily exposed to Iraq, slipped 1.6 percent, limiting the
blue-chip benchmark index's rise to 0.3 percent. The
wider index, however, added 1.2 percent as small-caps
continued to recover from last week's slump.
Qatar's index gained 0.05 percent as Qatar National
Bank and Industries Qatar partly recovered
from short-term weakness caused by changes in the FTSE frontier
market index last week. Shares in QNB and Industries Qatar added
1.1 percent and 0.4 percent respectively.
In a June 20 review, FTSE removed seven stocks with a
combined market capitalisation of $8.2 billion from the index
and replaced them with seven stocks that have a combined
capitalisation of $28.0 billion, reducing the weightings of
other components, including the Qatari stocks.
Before the reshuffle, the index had a total capitalisation
of $66.7 billion, implying constituents that remained in the
index had their weightings reduced by about a quarter. But since
very large amounts of money are not benchmarked to the FTSE
frontier market index, the impact on fund flows was not large.
Shares in Egypt's Beltone Financial Holding slid
3.5 percent as the offer period started for the 20 percent stake
in EFG Hermes, which a consortium including Beltone
and Egyptian billionaire tycoon Naguib Sawiris seeks to buy.
The offer to buy EFG Hermes shares at 16.0 pounds will run
until July 3, according to an EFG statement sent to the bourse.
EFG Hermes was flat at 15.35 pounds while the Cairo index
slipped 0.3 percent.
Saudi Arabia's Almarai edged down 0.2 percent
after the Gulf's biggest dairy company said it would invest,
together with U.S. soft drinks giant PepsiCo, at least
$345 million in Egypt over the next five years.
The stock underperformed the Saudi index, which
climbed 0.1 percent.
* The index fell 2.3 percent to 4,490 points.
* The index was flat at 4,804 points.
* The index added 0.05 percent to 12,460 points.
* The index rose 0.1 percent to 9,657 points.
* The index rose 1.2 percent to 7,024 points.
* The index slipped 0.3 percent to 8,316 points.
* The index fell 0.3 percent to 1,430 points.
* The index rose 0.04 percent to 6,916 points.
(Editing by Andrew Torchia)