Complex Made Simple

Strong starts as UAE shares regain value

Gulf Stock markets today registered a strong start for the second half of the year, with UAE shares regaining H1 losses after rising 1.7%. The Abu Dhabi Securities Exchange (ADX) rose 1.8% and Dubai Financial Market (DFM) 1.7%. UAE shares regained all of last week's Dhs14.8bn losses.

By Abdul Rahman Ismail

The Doha market rose 1.4%, Muscat 0.98%, while Saudi Arabia, Kuwait and Bahrain managed to reverse their indexes in the final minutes of trading and rose by 0.35%, 0.28% and 0.12% respectively.

Listed companies are due to start announcing their H1 results, which encouraged speculators to return to Gulf markets and seize new investment opportunities.

Dubai: Small traders feel optimistic

A feeling of optimism prevailed during trading today, after green, rather than red, coloured trading for second day. It gave small traders new hope of compensating their losses in the first half of the year.

All traded shares contributed today to the rise, except Tamweel and GIMA, which both fell.

Emaar rose by 1.3%, to Dhs11, supported by Credit Suisse’s new rating which determined its fair price is Dhs15. Ajman Islamic Bank rose, hitting its 15% maximum, after a full week of decline. Its share closed while demand was still high, with speculation back again on the share.

Foreign Funds continued to sell and were the reason behind the last two weeks of decline, while Arab and UAE investors purchasing orders today pushed the index up according to the DFM.
Non Arab sales today reached Dhs314.4m against Dhs118.8m purchasing.

Abu Dhabi and Doha back to historic records

The Abu Dhabi market index was back to its historic 5,000 points today, which it lost last week.

Four shares rose to their maximum limits of 10%, including Methaq, Abu Dhabi Insurance, Arab United and Fujairah Bank, while Sharjah Insurance and Gulf Medical fell by their maximum 10% limit.

Shuaa Capital’s rating of Etisalat pushed the telco up 1.5% to Dhs19.85. Shuaa set its fair price at Dhs26.20 and recommended buying the share.

The Doha market too was back to its 12,000 points mark, supported by the banking sector, which expects strong results in the second quarter of 2008.

Despite the weakness of trading value, bank shares jumped in value to a record high, including Qatar Islamic bank, which rose by 1.2% to QR95 on the expectation of an 87% rise in profits.

Islamic Bank rose by 3.7%, Qatar Commercial Bank 2.3%, and Al Rayan bank 0.46%, despite the expectation that Al Rayan’s profits will decline 48% for second quarter.

Saudi Arabia: Slight rise after fluctuations

The Tadawul ended today up 0.35%, after banks continued to put pressure on the index, with expectations that they will post lower profits for the second quarter after restrictions imposed by Sama on personal loans.

The decline of Al Rajhi by 1.7% and Arab United Bank by 1.1% pushed the banking index down.

The petrochemical sector was led by Sabic, which rose 0.89% to SR141.50. It traded SR552.6m of today’s total trading of SR6.5bn, helping to push the index up.

Saudi Telecom Company, which expects a 3% rise in second quarter profits, rose 1.2%, while Mobily, which expects to post a 35% rise in profits, fell by 0.93%.

Shares in Zain, which although listed is yet to reveal when it will begin operations in Saudi Arabia, remained unchanged after expectations mounted that it will post pre-operational losses.

Speculators piled into the insurance sector, which saw it top the most rising and most declining list. Ittihad Al Khaleej and Arab Insurance both posted record rises of 9.5%, while ASIG and Salama fell by 3% and 4% respectively.

Kuwait: Zain supports the index

The Kuwait Stock Exchange stopped its decline after support from industrial and real estate sectors, although the investment and banking sectors continued to have a negative impact on index.

Zain rose by 1.2% on the expectation of a 43% rise in profits for the second quarter. National Bank of Kuwait rose by 1% and Kuwait Finance House by 0.70% – both are expected to post 34% increases for the second quarter.

Banks lead the rise in Muscat and Bahrain

Banks led the Muscat market’s rise today after a positive assessment by analysts, especially Muscat Bank, National Bank and Al Ahli Bank, which dominated today’s trading of OR11.1m, amounting to 13.5 million shares.

Ahli Bank rose 4.7% to OR0.285, supported by expectations of a 51% increase in second quarter profits. Muscat Bank traded OR3m, rising by 0.67% as Global set its fair price at OR2.182.

Omantel rose by 1% to OR2.254, supported by expectations of a 24% increase in second quarter profits. Resot Cement was up 1.9%, supported by expectation of a 57% increase in second quarter profits.

The Bahrain stock market rose on the back of the hotel and banking sectors. Al Salam and Ithmar Bank alone traded three million out of the five million shares traded.

Al Salam rose by 0.74%, while Ithmaar remained unchanged at US$0.750.