Inmaa Bank shares, which were behind the fluctuation the Saudi stock market has experienced over the past two weeks, leapt 80% at one point on Tuesday, after dominating 60% of total transactions on the exchange. But its opening day performance did not prevent the Saudi market closing the day down by 0.15%.
By Abdul Rahman Ismail
Four Gulf markets ended the day on a positive note, with Muscat rising 0.56%, Abu Dhabi 0.40%, Bahrain 0.30% and Doha 0.18%, while Dubai and Kuwait followed the Saudi market, declining 0.38% and 0.03% respectively.
Strong growth in the Gulf
Reports issued by regional and international financial institutions expect Gulf markets to post strong growth in the second half of the year.
Merrill Lynch said the region's public companies have become more attractive to investors, while a report by Egypt's EFG Hermes expected noticeable growth in the second half of the year among GCC markets, especially in Saudi Arabia and the UAE.
Companies listed in Qatar and Kuwait are expected to post strong profits, with returns in Oman and Bahrain expected to be smaller.
New estimates for some shares on the UAE, Saudi Arabia and Qatar markets pushed prices to new records, especially as they strongly recommended that investors buy shares in companies such as Arabtec, Al Rajhi and Saudi Telecom Company, which was considered by EFG Hermes as the best.
Mixed day on UAE markets
The UAE stock markets ended the day slightly up by 0.05%; within this, although the Dubai Financial Market (DFM) closed down by 0.38%, the markets as a whole were pushed up by the 0.40% rise on the Abu Dhabi Securities Exchange (ADSE). The volume of trading retained its momentum, taking Dhs3.4bn between the two markets. The ADSE took Dhs2bn and the DFM Dhs1.4bn.
The decline in the DFM index was not sharp thanks to property developer Emaar's shares remaining unchanged at Dhs11.70, after fluctuating between Dhs11.55 and Dhs11.80 during the day.
Other leading shares made record rises before posting a decline during trading, including Amlak which ended down 1.1%, despite topping the list of most actively traded shares.
Arabtec, as usual, went against the index and rose by 0.91%, posting a new high of Dhs16.60, pushed onwards by EFG Hermes' recommendation to revalue the share to Dhs19.40.
Once again there was speculation around Ras Al Khaimah Cement's shares on the ADFM, registering Dhs1bn for the first time of the Dhs2bn traded, rising by 4.4%.
The speculation was attributed by analysts to deals conducted by real estate funds and investment portfolios, as cement firms are expected to post strong profits in 2008, after prices and demand for cement rose heavily on the back of the construction boom.
Tadawul negative despite Inmaa Bank
In Saudi Arabia, the Tadawul failed to respond positively to Inmaa Bank's first day of trading. The market has been waiting for trading to begin since it floated 70% of its shares two months ago - the largest IPO yet in the kingdom.
Inmaa Bank's IPO was 170% oversubscribed, collecting SR17bn. When the IPO was quoted, the bank's estimated a SR10 nominal value per share, valuing the company at SR15bn, but the higher trading increased Inmaa's value on the day.
Transactions on the stock began 45 minutes prior to the start of the trading session, opening at SR15.75 compared to its IPO price of SR10. The share jumped to SR18 as a result of extensive deals, before retreating to SR14.25. It closed at SR16, and so rising by 60% on its first day and accounting for SR9bn of the total SR15bn of shares traded.
The share price was within analysts' expectations; Kasb Financial Group set a price of SR15, which is seen as suitable for buying. The impact on Tadawul is expected to be between 1-1.5%. Overall, the banking sector declined, except for Inmaa and Saudi Hollandi, whose shares rose 3.4%.
The telecom sector also dropped, with Mobily down 2.2% and STC by 0.40%, although Zain posted a 1% gain.
The building sector posted a record rise of 5.5%, with three companies (Al Babtain, Al Zamil and Al Jabs) hitting their maximum 10% limit and Al Khazaf going up 8.1%.
Kuwait down, but Muscat hits record high
In Kuwait, the Stock Exchange index declined slightly, after coming under pressure from the service and industrial sectors, despite their previous rises.
Zain's shares rose for the third consecutive day, by 2.2% after Bahrain's Zain expressed its intention to launch an IPO. Watanya Telecom's share also rose, by 3.6%.
Al Sefa International rose unexpectedly by 6.2%, despite announcing first quarter losses of KD19.2m, compared to a profit of KD226m for the same period last year.
In Muscat, the stock market rose to record high, coming close to 12,000 points, thanks to shares in United Financing, Muscat Financing and Al Jazira Services, which dominated 33% of the total 31.5 million shares traded.
United Financing topped the gain, rising 5.6%. Muscat Financing rose 3.3% and Al Jazira Services by 1.3%, topping the list of most actively traded shares. It traded OR1.8bn of the OR13.8bn worth of transactions in the market.
Doha and Bahrain
Doha Securities Market rose, with Gulf International up 6.3% and dominating 43% of the total 35.2 million shares traded in the market, valued at QR1.8bn.
Ithmar and Gulf Tameer led Bahrain's market to rise, with Ithmar trading one million shares out of the 3.9 million that were traded. It closed unchanged at $0.70, while Gulf Tameer posted the highest rise (4%) at BD20.50, while Gulf Finance House rose 1.4%.