UAE and Egypt indices rise on earnings

01/08/2014 10:04 AST

Stock markets in the United Arab Emirates and Egypt rose on Thursday on the back of strong second-quarter earnings at banks and expectations for similar performances by real estate developers.

The Dubai benchmark added 2.0 per cent as the UAE markets resumed trading after three days of Eid Al Fitr holidays. Dubai Islamic Bank, which posted a 59.6 percent jump in second-quarter net profit last week, was the main support, rising 3.1 percent.

Construction firm Arabtec dominated turnover, jumping 4.9 per cent as stock exchange data showed its largest shareholder, former chief executive Hasan Ismaik, continuing to trim his stake, which has dropped since last week to 28.59 percent from the original 28.85 per cent.

Some investors hope Abu Dhabi state fund Aabar Investments, the second biggest Arabtec shareholder with 18.94 percent, will buy at least part of Ismaik’s holding. But the Aabar stake has not increased as Ismaik’s has edged down.

Among other stocks that supported the Dubai market were developers Emaar Properties, Union Properties UPRO.DU and Deyaar, which gained 0.7, 4.4 and 2.4 percent respectively. Emaar is expected to announced second-quarter earnings in the next few days.

“We had good results from banks and I think people are expecting good results from developers now,” said Sanyalak Manibhandu, manager of research at NBAD Securities.

Abu Dhabi’s largest listed developer, Aldar Properties, gained 5.0 percent, helping lift the emirate’s main index 1.0 per cent.

Shares in Abu Dhabi Commercial Bank ADCB.AD, which last week reported a 22-percent rise in second-quarter profit, jumped 5.8 percent.

The biggest gainer was Islamic insurer National Takaful Company WATA.AD (Watania), which surged 14 percent after announcing on Sunday that its majority shareholders had agreed to sell stakes to strategic investors from the Gulf region, which it did not name.

Some market players, however, say the UAE markets may pull back next week because of external factors such as global tensions over Ukraine and the continued tapering of the U.S. Federal Reserve’s bond purchases.

“All this news is not really positive so we should expect some profit-taking in the coming session,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.

Reuters