World Cup boosts Gulf bourses

07/12/2010 00:00 AST

Qatar Electricity & Water (QEWC) led Doha's index to a new 26-month high on Monday, with investors continuing to buy into its World Cup story as construction-related regional stocks also rose. The Qatari index climbed 0.6 percent to 8,531 points.

QEWC climbed 1.2 percent to its highest finish in at least two years.

Qatar said it will create 12 air-conditioned outdoor stadiums as part of its winning bid to host the 2022 soccer World Cup, while the country will spend an estimated $100 billion on infrastructure over the next five years.

"Qatar will need a lot more power capacity to meets its commitments for the World Cup," said Scott Darling, Nomura analyst. "That power will indirectly come from QEWC, which will have to start building out this new power generation in the next few years, while domestic demand is already pretty robust."

UAE bourses reopened after a four-day break. Builder Arabtec surged 9.1 percent in its biggest gain in eight months and contractor Drake & Scull (DSI) rose 6.5 percent to a 12-month high as traders bet on a Qatar world cup windfall. Both firms are already active in Qatar. The Dubai index rose 1.1 percent to 1,706 points.

Kuwait was near-flat as traders await a $12 billion Zain stake sale to Abu Dhabi's Etisalat. The measure edged up 0.03 percent to 6,868 points.

"We're not seeing a Qatar effect in Kuwait - there's little trading, with just a bit of profit taking," said a Kuwait trader who asked not to be identified. "So much capital is locked up in the Zain deal."

Zain has a market capitalization of $20.7 billion, so around $9.5 billion is being held by investors waiting for the 46 percent stake sale to be completed.

Zain ended flat at 1.420 dinars. Investors were little moved by Securities Group Co. saying it now wants to join Zain's selling consortium. The brokerage firm has opposed the structure of deal, while Al-Fawares Holding, which owns 4.5 percent of Zain, last week launched a lawsuit to halt due diligence.

"Ultimately people just want to know if the deal will be done or not," said the trader. "Kharafi obviously wants the deal to go through, but other market players don't on the agreed terms - there's a lot of partiality in the deal."

Kharafi group, itself a major Zain shareholder, has led the sale, which is priced at 1.700 dinars per share, but will not be done on a pro rata basis. Securities Group fell 5.5 percent.

Egypt's index fell 0.4 percent to 6,736 points.

Saudi Arabia's Almarai rose 3.2 percent after the dairy firm made a two-for-one stock split in a move usually taken to boost trading volumes.

The Tadawul All-Share Index (TASI) eased 0.04 percent to 6,401 points. The sector activity for the day was mixed with 8 out of 15 closing with gains ranging from 0.09 percent by the Building & Construction sector to 1.76 percent by the Agriculture & Food Industries sector. On the other hand the losing sectors ranged from 0.08 percent by the Telecommunication & Information Technology sector to 0.31 percent by the Energy & Utilities sector. The overall market breadth for the day was negative with 45 advancers against 69 decliners giving it an AD ratio of 0.65, the Financial Transaction House (FTH) said in its daily market commentary.

The Saudi stock market turnover reached SR2.87 billion on Monday.

Arab News