Shares across Gulf drop; ENBD pulls down Dubai

Stock markets across the Gulf slipped yesterday, either reversing gains or extending losses from the previous session, as disappointing earnings and seasonal factors weighed.In Dubai, Emirates NBD, the emirate’s biggest lender, slipped 3% after reporting a decline in quarterly net profit due to higher costs linked to its Dubai Bank merger.The company said second-quarter profit fell 13% to 647mn dirhams ($176.1mn) in the three months to June 30. Provisions fell for the second straight quarter after hitting the bank’s top line heavily in 2011.“Although provisions remained high, they were slightly toned down, leaving lacklustre top-line performance as the major reason behind weakened net income,” Naveed Ahmed, analyst at Global Investment House said in a note.Shares in Emirates NBD are down over 8% year-to-date. Dubai’s bourse ended 1.5% lower at 1,493 points, yesterday, down for a third straight session. Real estate heavyweight Emaar Properties fell 2.2%.Total shares traded on the Dubai bourse were under 60mn, higher than Sunday’s session but still indicative of seasonal factors such as the holy month of Ramadan and a summer slowdown.“The whole market followed ENBD’s trend,” said a Dubai-based analyst who asked not to be identified. “Volumes are low though and don’t expect a major change this season.”Elsewhere, Kuwait’s index gave back the previous day’s gains, with National Industries Group (NIG)slumping 4% after it asked creditors for a four-year extension on a $475mn Islamic bond, due to mature in August.Ratings agency Moody’s said it had placed NIG’s ratings under review for a possible downgrade.Boubyan Bank slipped 1.6%.Yesterday, National Bank of Kuwait disclosed it will raise its stake in Boubyan to 58.34% from 47.3% currently, following the closure of the tender offering period and pending final approval from the Capital Market Authority (CMA).In Saudi Arabia, Sunday’s gains were reversed as petrochemical stocks came under selling pressure, led by heavyweight Saudi Basic Industries Corp (Sabic) which slipped 3.1%.Rabigh Refining and Petrochemical fell 1.7%, underperforming the broader sector index which retreated 1.4%.“Oil price worries are back on the table plus global economic woes continue. It’s basically just no good news,” said Muhammad Faisal Potrik, research analyst at Riyad Capital.“Results season is over — petchems have been disappointing and banks performed better in Q2, but there is no real excitement right now especially with Ramadan here. Market activity is subdued.”The index ended 0.9% lower.Oil prices were down about 4% yesterday as investors sought to sell riskier assets and flee for the perceived safety of the dollar on fears that Spain will not be able to avoid a costly sovereign bailout.All other Gulf bourses ended lower. Abu Dhabi’s measure slipped 0.1% to 2,469 points, the Kuwaiti index dropped 0.5% to 5,813 points and Saudi Arabia’s benchmark retreated 0.9% to 6,641 points.Oman’s index slipped 0.2% to 5,436 points, while Bahrain’s measure eased 0.1% to 1,109 points.Meanwhile, Egypt’s benchmark ended flat at 4,868 points.