Gulf stocks mainly rise; Kuwait down as key developer reports Q3 loss

Reuters

Dubai

Bourses across the Gulf gained yesterday along with global markets, with the exception of Kuwait, where property stocks dropped after a local developer reported a widening third-quarter loss.

“There is enough momentum to push markets right now and there are at the moment no negative external factors,” said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC.

Dubai posted the biggest gain yesterday, jumping 1.5%, although analysts said the move reflected its increased volatility in the run-up to the November 27 decision on the emirate’s bid to host the Expo 2020 world fair. Abu Dhabi’s bourse rose 1.1%.

Gulf airlines, led by Dubai’s state-owned Emirates and Abu Dhabi’s Etihad, ordered about $100bn of planes on the first day of the Dubai Airshow on Sunday, a signal of optimism by the governments of the two emirates.

Major property developer Emaar rose 1.8%. Drake and Scull climbed 3.1% after it said a wholly owned German subsidiary won a Dh179mn ($48mn) deal to build waste water treatment facilities in Egypt, suggesting the company’s efforts to expand its international business may be bearing fruit.

But the Dubai market — which sits on the region’s highest year-to-date gain of 73% — remains susceptible to large swings based on Expo-related speculation, said Amer Khan, fund manager at Shuaa Asset Management.

“I continue to expect the market to be volatile,” he said.

Saudi Arabia posted smaller gains at 0.3%. The index  has been rising steadily for the last two weeks, hitting five-year highs on what analysts said was year-end dividend-hunting.

“I think the momentum is still there to see the index and the market consolidating at higher levels,” MASIC’s Sfakianakis said of the Saudi index, which reached 8,408 points. “The index...is clearing away from 8,000 towards 8,500.”

Kuwait’s index fell 0.6% to a two-week low after developer Mena Real Estate reported a third-quarter net loss of 304,000 dinars ($1.1mn) compared with a loss of 225,000 dinars in the same period of 2012.

The stock tumbled 8.2% and shares in other real estate companies, such as National Ranges (Mayadeen) and Investors Holding Group, also declined.

Egypt’s bourse rose 1.1%, posting gains for a second day after two weeks of profit-taking.

Local financial newspaper Al Mal reported yesterday, quoting an unnamed official, that Saudi Arabia and the United Arab Emirates were about to pledge a further $9bn in financing for the Cairo government in addition to the $12.9bn already promised. Officials in the Gulf declined to comment.

Elsewhere, the Bahrain index edged up 0.2% to 1,200 points and the Oman index edged up 0.06% to 6,769 points.