Arabtec surged 14.2% yesterday, easing pressure from the decline of heavyweight Emaar Properties, which retreated 1.5%


Middle Eastern stocks rose yesterday as oil prices and global equities firmed slightly, and because of expectations that Saudi Arabia’s state budget would be announced next Monday.
Investors had been expecting the Saudi budget release this week but Saudi-owned Al Arabiya television reported late on Monday, quoting sources, that it would come on December 28.
Without the threat of an imminent announcement — the budget is expected to include substantial spending cuts as Riyadh works to shrink its deficit — short-term investors in Saudi Arabia and the wider region felt more comfortable buying on dips.
“Now that traders expect the news next week, today’s trading resumed as per usual with investors picking up stocks to turn a quick profit,” said Tarek al-Mady, a Riyadh-based independent financial analyst.
The Saudi index rose 1.7%. Alinma Bank gained 2.4% and was the most heavily traded stock after it announced a dividend cash payout of 0.5 riyal per share for 2015, in line with its 2014 dividend.
It is the second Saudi bank to announce an annual dividend. Saudi Hollandi Bank last week proposed a cash payout, which was 75% lower, but also announced a large bonus share issue. The oldest lender in the kingdom was 4.4% higher yesterday.
Saudi Telecom (STC) fell 1.9% after the board of Kuwait’s Viva advised shareholders that the pricing of STC’s takeover offer was not fair. STC said it would proceed with its offer and did not intend to change the price.
Dubai’s index rose 1.5%, adding to Monday’s gains. Builder Arabtec, often volatile, surged 14.2%, easing pressure from the decline of heavyweight Emaar Properties, which retreated 1.5%.
Abu Dhabi’s bourse added 0.4%, buffered by blue chip banks; it posted its fifth straight session of gains. Abu Dhabi Commercial Bank and National Bank of Abu Dhabi rose 3.3 and 0.8% respectively.
“Abu Dhabi’s banks have remained relatively resilient because the US interest rate hike on Wednesday, with the UAE central bank following suit, will help the profitability of those banks,” said a Dubai-based banking sector analyst.
The outlook for credit growth in the short term may not be as rosy as in prior years owing to pressure on macroeconomic growth, but the medium-term outlook is resilient because of improved asset quality and lower provisioning for bad loans, said a note by Emirati research firm Alramz.
Egypt’s benchmark edged up 0.1%, closing higher for a seventh straight session, with Orascom Telecom and EFG Hermes carrying the market higher. Combined, the stocks accounted for about one-third of the market’s total value traded.
EFG Hermes rose 3.5% and Orascom advanced 1.6%, adding to gains it has enjoyed since Thursday’s close, when it agreed to buy Commercial International Bank’s (CIB) investment banking subsidiary CI Capital for 1bn pounds ($128mn).
CIB ended down 2.0% yesterday but rose in early trade. “We think CIB’s risk-reward profile is now more attractive in the context of regional banks and believe Egypt’s fundamental economic outlook is far more robust than in 2011-2013,” said a note by HSBC Global Research.
Elsewhere in the Gulf, the Kuwait index climbed 0.2% to 5,625 points, the Bahrain index was flat at 1,190 points and the Oman index advanced 0.3% to 5,418 points.

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