Gulf stock markets were volatile yesterday as oil prices hit new lows, but most bourses eventually edged up on the back of positive
corporate announcements and expectations, continuing a trend towards partially decoupling from oil.
Brent crude fell to its lowest level in almost six years and traded below $46 per barrel yesterday as the UAE defended Opec’s
decision not to cut output to tackle a glut in the market.
Most Gulf bourses opened lower against that background, but then moved into positive territory even as oil plunged further.
“The markets fell very steeply in the fourth quarter and hence investors think there is value in this market,” said Shakeel Sarwar,
head of asset management at Securities & Investment Co (SICO) in Bahrain. “People think that the oil price decline is nearing its
end,” he said, adding however that volatility was likely to persist until oil indeed found a clear floor.
Saudi Arabia’s stock index edged up 0.7% as petrochemicals were nearly flat while banks extended their gains after a series of
strong fourth-quarter results.
Shares in Samba Financial Group, the kingdom’s fourth-largest bank by assets, jumped 4.5% after it posted a 22.5% rise in its
fourth-quarter net profit, beating analysts’ forecasts.
The lender made 1.23bn riyals ($328mn) in the quarter, while analysts surveyed by Reuters had expected it to post an average of
Bank Aljazira added 1.3% after its fourth-quarter profit rose 32.7% to 199mn riyals, beating analysts’ average estimate of 178mn
Among losing stocks, Saudi Arabian Fertiliser Co slid 1.6% after reporting a 3% drop in fourth-quarter net profit to 779mn riyals,
below the average forecast of 893mn riyals.
Dubai’s index rose 1.7% as the two most traded stocks, developer Emaar Properties and builder Arabtec Holding, jumped 4.2% and 3.7%
Investment bank SHUAA Capital surged 3.3% after the firm said its unit Gulf Finance Corp had raised a 500mn dirham ($136.1mn) loan
which will be used to fund its growth in the UAE and Saudi Arabia.
Abu Dhabi’s benchmark rose 1.4% as blue-chip lenders National Bank of Abu Dhabi and Abu Dhabi Commercial Bank climbed 4.5 and 4.4%
Qatar shares edged up and Industries Qatar, which had tumbled in the previous two sessions after its board proposed a lower-than-
expected 2014 dividend, stabilised and inched down just 0.07%.
The Bahraini market slipped 0.6%, dragged down by Aluminium Bahrain, which dropped 2.9% after Bahrain’s cabinet decided to raise
prices of natural gas sold to industrial users.
Bahrain’s state finances are weaker than those of neighbouring Gulf oil exporters, so low oil prices are putting heavy pressure on
its budget; cutting gas subsidies is one way to raise money.
Meanwhile, the stock market in oil-importing Egypt continued to outperform the broad Middle East region and jumped 2.2% in a broad
GB Auto, the country’s biggest listed vehicle assembler and distributor, led gains as it surged its daily 10% limit for the second
day in a row.
The firm’s chief executive told Reuters last week that it was working on a rights issue and planned to invest $1.5bn to build two
new factories. On Monday, the firm said the rights issue would be worth 960mn Egyptian pounds ($134mn).
Property firm Medinet Nasr Housing surged 5.3% after reporting a block trade in its shares. At 152,790 shares, the trade
represented a stake of less than 0.08%.
However, it followed an announcement in late December of a bigger deal in which Beltone Investment Group increased its stake in
Medinet Nasr Housing to 24.15%.
Shares in El Sewedy Electric surged 9.8%. The firm said last week it had won a government contract to build two power stations in
Elsewhere in the Gulf, Kuwait’s index edged up 0.2% to 6,572 points, while Oman’s fell 1.1% to 6,370 points.
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