Arabtec helps UAE outperform other Gulf stock markets

24/03/2015 06:33 AST

A rebound by Dubai builder Arabtec lifted the mood of investors in the United Arab Emirates stock markets yesterday, while other bourses in the Middle East moved very little as oil once again halted its advance.

Brent oil slipped 0.2% and traded near $55 per barrel after Saudi Arabia indicated it was now pumping near a record high of 10mn barrels per day, adding to concerns about global oversupply.

Petrochemicals giant Saudi Basic Industries (Sabic), whose earnings are sensitive to oil prices, slipped 0.5%, but the kingdom’s main stock index added 0.1% thanks to foodmakers Savola Group and Almarai. Savola surged 6.7% to 73.75 riyals after plunging 10.1% in the previous two sessions because of a cut in its first-quarter profit forecast.

NBK Capital on Sunday upgraded the stock to “hold” from “sell”, raising its fair value estimate 10% to 77riyals on an improved medium-term outlook.

Dairy firm Almarai, in which Savola is the biggest shareholder with a 36.5% stake, rose 5.3% yesterday after Egyptian newspaper Al Borsa reported that the company planned to invest $400mn in the country.

According to the report, Almarai plans to expand its plant and build a new dairy farm, and is also eyeing acquisitions in the sector.

Dubai’s index jumped 2.2% as trading focused on Arabtec, which rose 3.8% to 2.45 dirhams. The stock, which had tumbled its daily 10% limit in the previous session, bounced off major technical support around its July 2014 low of 2.35 dirhams.

Arabtec said on Sunday it had swung to net loss of 94.4mn dirhams ($25.7mn) in the fourth quarter of last year. It also proposed no cash dividend, offering a 5% bonus share issue instead.

Abu Dhabi’s benchmark rose 1.3% and First Gulf Bank, up 2.6%, was one of the main supports. The bank’s chief executive, Andre Sayegh, told UAE newspaper The National that the lender was considering expanding into Egypt. Oman’s index edged down 0.4%, largely because of ex-dividend Oman Telecommunications, while Kuwait was nearly flat. The Kuwait index climbed 0.04 percent to 6,426 points.

Egypt’s market edged up 0.2% on the back of blue chips Talaat Moustafa Group and Commercial International Bank, which rose 2.5 and 0.6% respectively.

Carpet maker Oriental Weavers climbed 0.5% after its board proposed a 0.4 Egyptian pound dividend for 2014, unchanged from 2013. The Egypt index edged up 0.2% to 9,374 points and the Bahrain index rose 0.2% to 1,455 points.

Reuters