Property firms and banks sink UAE, other markets sluggish

Most Gulf stock markets consolidate because of a weak global environment and a lack of fresh, positive news

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Most Gulf stock markets consolidated on Wednesday because of a weak global environment and a lack of fresh, positive news as the second-quarter earnings reporting season drew to a close in many countries. Profit-taking in property firms and banks pulled down Dubai and Abu Dhabi.

European stocks suffered their biggest one-day fall in nearly a month after another slump on Wall Street and tensions over Ukraine created a mood of risk aversion. Brent crude oil posted its weakest close since November 2013 on Tuesday, though it partially recovered on Wednesday.

This affected the Gulf, where the long-term economic and market outlook remains positive but with second-quarter earnings season mostly over, short-term retail investors see few new incentives to buy on the immediate horizon.

Profit-taking was particularly heavy in the United Arab Emirates, where Dubai's index fell 2.4 percent. Emaar Properties sank 3.9 percent, dropping for a second day after it reported strong second-quarter earnings that failed to deliver a positive surprise.

Construction firm Arabtec declined 3.6 percent. Bourse data showed former chief executive Hasan Ismaik, who resigned abruptly in June, has been continuing to trim his stake in the firm, which has dropped to 27.90 percent from 28.85 percent in late July.

Investors have been hoping that Abu Dhabi state fund Aabar investments will buy at least part of that stake, which would signal its firm support for Arabtec, but the data shows Aabar's holding staying steady at 18.94 percent.
Trading volumes in Dubai have been modest since the market reopened at the end of last week after long Eid holidays. This encouraged a 4.1 percent slide in the shares of bourse operator Dubai Financial Market.

Abu Dhabi's index dropped 0.9 percent. UAE banks posted strong second-quarter earnings but the market has now fully digested them; Abu Dhabi Commercial Bank slid 4.8 percent.

Dana Gas reported a 70 percent jump in second-quarter net profit and said it expected to recover the vast majority of overdue payments which the Egyptian government owes it - now totalling $297 million - by 2018, under a new arrangement under which it would sell increased condensate output in international markets. But this failed to boost the stock, which dropped 2.8 percent.

Qatar, Saudi

Elsewhere, Qatar edged down 0.5 percent despite news that the emir had issued a law, originally announced in May, providing for foreign investors to own up to 49 percent of listed Qatari companies. Currently, ceilings on combined foreign ownership are usually no more than 25 percent.

It was not immediately clear whether all Qatari firms would now be obliged to raise their ceilings to 49 percent, or how much time they would have to do so. Fund managers said that while the reform was a positive step, it was unlikely to trigger any quick surge of funds into Qatar.

"There should be limited impact from the law in the short term due to liquidity issues and limited numbers of shares available," said one Gulf wealth manager.

Saudi Arabia edged up 0.3 percent, rising for an eighth straight day and continuing a leg up on the back of the announcement that the market would open to direct foreign investment early next year. But turnover shrank and the index did not rise above Tuesday's intra-day high, suggesting the uptrend was losing steam.

Hospital firm Al Hammadi fell 1.3 percent to 73.75 riyals, falling for the first time since it listed at an IPO price of 28 riyals in mid-July.

In Egypt, the market continued rising after this week's technical breakout above the May and June peaks, and news of a $4 billion plan to build a new Suez Canal by the existing waterway. The index gained 0.4 percent.

Upper Egypt Contracting, a construction and engineering firm, rose 1.9 percent in an apparent bet that it would benefit from the Suez project.

However Global Telecom Holding sank 3.5 percent after reporting a net loss of $173.1 million for the second quarter of 2014, down from a $22.7 million loss a year earlier. It blamed a weak Egyptian pound and impairment charges at its African operations.

The Kuwait index edged up 0.1 percent as companies in the Al Safat group surged in heavy trade; Al Safat Energy rose 2.7 percent, Al Safat Real Estate jumped 7.0 percent and Danah Al Safat rose 1.3 percent.

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