May 1, 2016 / 5:45 AM / 4 years ago

MIDEAST STOCKS-Gulf may move little, banks restrain Abu Dhabi

DUBAI, May 1 (Reuters) - Gulf stock markets may move little on Sunday with few positive catalysts, while weak bank earnings may continue to cap Abu Dhabi.

Brent oil futures settled at $48.13 a barrel on Friday after reaching a 2016 peak at $48.50. They rose 21.5 percent in April, the largest monthly advance since May 2009.

This is good news for the Gulf but stock markets have already been gaining for two or three months in response to the idea that oil prices have bottomed out, and investors are now focusing on the damage to corporate earnings from austerity policies in the region.

“The real question is to assess if markets will hold these levels if oil prices drop again. It’ll be the reality check for equity markets,” said Sebastien Henin, head of asset management at Abu Dhabi’s The National Investor.

Many retail investors may increasingly decide to book profits with the holy month of Ramadan, when some players traditionally cut back activity, only five weeks away.

After weak results from blue-chip Abu Dhabi banks last week, Union National Bank posted a 27 percent drop in first- quarter net profit. Net profit attributable to equity holders of the bank came in at 447 million dirhams ($121.76 million); two analysts polled by Reuters had forecast 314.00 million dirhams and 454.30 million dirhams.

Shares in UNB dropped 4.5 percent last week as other Abu Dhabi bank shares slumped. (Reporting by Celine Aswad; Editing by Andrew Torchia)

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