Last week’s news that Emaar Properties posted a surge in operating profit in the third quarter helped Dubai’s benchmark index advance 0.9 percent to 2,263 points. Shares in Emaar advanced 1.3 percent.
The third quarter result is the main reason for the bounce back in interest in Emaar," said Chamel Sahmy, regional senior sales trader for Beltone Financial. "Diversification has proven positive for Emaar… and it might continue to post solid figures in Q4.
Union Properties and Arabtec also rose, each adding 1.2 percent. Similarly, banks contributed to gains in Abu Dhabi, after result announcements from First Gulf Bank and Union National Bank beat analyst expectations. FGB, which is the Emirate’s second largest lender by market capitalization, advanced 4 percent, while UNB rose 3.4 percent.
Third quarter results from FGB and UNB are driving the interest in the banking sector," said Moussa Haddad, head of Middle East equities desk at National Bank of Abu Dhabi (NBAD). He expected results from NBAD, Abu Dhabi’s largest lender by market capitalization and Abu Dhabi Commercial Bank to further boost banking stocks.
Yet, positive sentiment expressed in the UAE was not replicated among investors elsewhere in the region. Kuwait and Oman benchmarks saw the largest selling pressure, partly due to jitters over liquidity and the banking sector.
There is a negative vibe surrounding Kuwait," said Talal Al-Loghani, vice president for Gulf equity markets at Kuwait Finance and Investment Co. "The main concern is liquidity, this has been an issue for the last couple of weeks and the value of trading per day has dramatically sunk… Another thing is the delay of third-quarter results in Kuwait, compared to other GCC markets.
The results which filtered through after market hours are unlikely to reassure jittery investors and strike a further blow to Kuwaiti banks facing a liquidity squeeze.
Kuwait’s Gulf Bank announced it had transferred all of its third quarter operating profit of 42 million dinars to provision against non-performing loans. The bank ended 1.5 percent lower yesterday.
Kuwait Finance House reported a 46 percent decline in Q3 profit, while quarterly profit at Ahli Bank of Kuwait plunged 84 percent.
Third quarter earnings are already weighing on Oman’s benchmark which was pulled lower by industrials and services stocks. Raysut Cement Co slipped 4.2 percent after announcing lower than expected earnings, and Oman Cable Industry ended 2.7 percent lower.
The index closed 1.5 percent lower on 6,509 points. In Saudi Arabia, the region’s largest economy, the benchmark index slipped 0.6 percent to 6,528 points after hitting a year high of 6,579 earlier in the trading session.
The market rally may have stretched valuations and so I would not be surprised to see some profit-taking (in the medium term), which would be healthy," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments, speaking at a regional level.