Equities mixed; etisalat weighs on Abu Dhabi

20/04/2011 00:00 AST

UAE bourses on Tuesday ended mixed in lacklustre trade as investors looked towards remaining first quarter results for confirmation on their investments before building further positions.

“It’s normal to have a pull back after a recent run due to the pick up in global equities,” said Julian Bruce, EFG-Hermes director of institutional equity sales.

The Dubai Financial Market’s General Index pushed higher in a bull market, crossing a 14-week high. The benchmark index ended 0.1 per cent higher at 1,654.50 points.

Emirates NBD gained 1.4 per cent and du rose 0.6 per cent. Air Arabia ended flat at 0.76 fils.

“We lowered our 12-month fair value target for Air Arabia’s stock price by 20 per cent, from Dh1 per share to 0.80 fils per share,” said a note from NBK Capital. “This drop in valuation is driven by tighter operating margins and the decline in the value assigned to the hubs in Morocco and Egypt,” it added.

NBK said that while fuel prices are 50 per cent higher in 2011 than the average for 2010, the airline has only hedged for 15 per cent of its needs.

The Abu Dhabi Stock Exchange’s General Index fell 0.2 per cent to close at 2,703.57 points, edging away from Monday’s nine-week high.

Etisalat reversed the earlier gains and dropped 0.5 per cent after posting below expected first-quarter results. Its net profit fell by 8.9 per cent.

Etisalat had 7.43 million UAE mobile subscribers, 1.13 million fixed-line subscribers and 0.49 million internet subscribers by March-end.

“We suspect that, in addition to aggressive competition, there could have been a subscriber base clean-up through service cut-off for non-registered SIM cards,” which affected revenues, said a note from EFG-Hermes. Dana Gas and First Gulf Bank weighed on the index with a 1.4 per cent and 2.2 per cent decline, respectively.

Reuters