Banking sector gingers up UAE and ME stock markets

02/06/2016 05:55 AST

A rebound in the banking sector buoyed Saudi Arabia’s bourse on Wednesday and other Gulf bourses also rose, with Dubai’s Shuaa Capital surging on hopes that potential buyers of a stake in it had placed high bids.

The Dubai index recovered early losses and edged up 0.1 per cent to 3,315 points; it faces technical resistance at the mid-May high of 3,373 points, from which it retreated earlier this week.

Abu Dhabi’s index gained 0.8 per cent, supported by rises in Dana Gas and telecommunications firm Etisalat, which climbed 3.8 and 2.3 per cent respectively.

Saudi banking shares, which were among the market’s worst performers in May, attracted buying on dips as Saudi British Bank (SABB) jumped 3.2 per cent. Riyadh’s main stock index edged up 0.2 per cent.

Healthcare and education shares were also strong with Al Hammadi Co, the medical equipment supplier, adding 2.2 per cent.

The only listed education stock, Al Khaleej Training and Education, rose 3.1 per cent. Yanbu National Petrochemicals (Yansab) erased some of its 6.5 per cent gain in the previous session and dropped 1.7 per cent.

On Tuesday the company said its board recommended the distribution of a higher dividend for the first half of this year. Cairo’s main index gained 1.2 per cent.

Sixth of October Development and Investment rose 3.3 per cent; on Tuesday the company reported a 31 per cent drop in first quarter net income to 54.7 million Egyptian pounds ($6.2 million).A note by Cairo firm Naeem Brokerage said that although both top line and bottom line results came in below its expectations, it was maintaining a “buy” rating on Sixth of October because of its strong balance sheet and healthy net cash position.

Investment bank EFG Hermes climbed 3.7 per cent to 11.65 pounds, its highest finish since last July.

It has been in an uptrend since mid-May; Dubai Group has said it will divest its 11.8 per cent stake in EFG by the end of this year, and investors are hoping that a strategic shareholder could benefit the company. A week ago, HSBC raised its target for the stock to 13.2 pounds from 11.5 pounds.

The Gulf Today