Sunday, 22 March 2015 18:13
DUBAI: Saudi Arabia’s bourse rebounded further on Sunday after oil prices mounted an end-of-week rally, while other Gulf markets were steady although Arabtec weighed on Dubai following the builder’s poor quarterly results.
Brent oil rose 1.6 percent to $ 55.32 per barrel on Friday while U.S. crude futures for April delivery jumped 4 percent to settle at $ 45.72 as the dollar posted its biggest weekly decline against the euro in more than three years.
Saudi Arabia’s main stock index added 1.5 percent, as petrochemical giant Saudi Basic Industries (SABIC) climbed 1.1 percent and other sectors, such as banks and property firms, were also strong.
Real estate developer Dar Al Arkan jumped 2.8 percent and was the most traded stock, while Emaar Economic City climbed 2.2 percent. Top lender National Commercial Bank surged 4.2 percent.
Local and regional investors are accumulating Saudi equities as the kingdom prepares to allow direct foreign share ownership in the first half of 2015. A similar phenomenon helped Dubai’s index more than double in 2013 when index compiler MSCI said it would upgrade it to emerging market status.
Savola Group stabilised, falling 1.1 percent. It dropped by its daily 10 percent limit on Thursday after the firm halved its outlook for first-quarter profit before capital gains because of suffering retail sales and exports.
Yanbu National Petrochemicals Co and Southern Province Cement fell 1.8 and 2.4 percent respectively as they went ex-dividend.
UAE, EGYPT
Dubai’s index was the weakest in the Gulf, falling 1.4 percent because of builder Arabtec which tumbled its daily 10 percent limit.
The company posted an unexpected fourth-quarter loss of 94.4 million dirhams ($ 25.7 million), blaming non-recurring general and administrative expenses.
Arabtec reorganised itself and laid off some executives and staff after the abrupt departure in June last year of former chief executive Hasan Ismaik, who resigned after differences of opinion with Aabar Investments, a key shareholder.
The construction firm, whose shares are among the most traded on Dubai’s bourse, also proposed no cash dividend for 2014, but offered a 5 percent bonus share issue.
Other Gulf markets consolidated. Abu Dhabi slipped 0.3 percent and Qatar eased 0.05 percent.
Telecommunications firm Ooredoo fell 1.1 percent after it warned investors last week it expected revenue to fall by as much as 3 percent in 2015 and core earnings to drop by a similar margin.
Commercial Bank of Qatar jumped 3.7 percent despite going ex-dividend after its shareholders approved the issue of up to $ 1 billion in capital-raising instruments.
Egypt’s index fell 1.7 percent as all of its constituents declined.
One reason for the market’s weakness could be investors cashing out to take part initial public offer of Misr Fertilizers Production Company (MOPCO), which announced its intention to list at the end of last week.
The listing is part of a flurry of initial public offerings, mergers and rights issues that have boosted market activity. Egyptian food maker Edita will put up shares in a secondary offering in April and Orascom Construction completed a secondary offer this month.
Copyright Reuters, 2015
