Robust volumes push Gulf bourses higher

Strong trading volumes helped lift major stock markets in the Middle East yesterday as investors were encouraged by the recovery in oil prices and firmer global bourses.
Riyadh’s stock index gained 1.7%, lifted by the petrochemical sector, which jumped 3.5%. Saudi Basic Industries (Sabic), the largest listed petrochemical producer, rose 3.9%. Brent oil futures were trading above $34 a barrel when the bourse closed.
Most small and mid-cap stocks in the insurance sector climbed as local traders accumulated shares. Insurers SABB Takaful and AlAhli Takaful surged 9.6 and 4.0% respectively.
Home appliance manufacturer Shaker Group closed flat after falling as much as 2.6% early in the session after the company announced yesterday it would not distribute dividends for 2015 to support future growth. Analysts at NCB Capital had estimated the company would distribute 1.5 riyals per share; last year the cash distribution was 1.4 riyals.
United Electronics was also flat after the electronics retailer said it would suspend cash dividend distributions for the fourth quarter of 2015 to finance its expansion plans. The company paid 1 riyal per share in the first half of 2015.
Cairo’s main benchmark rose 1.3%, its second day of gains as foreign and particularly non-Egyptian Arab traders accumulated shares, bourse data showed.
Beltone Financial surged 10%; it has more than doubled in the last nine trading sessions. In a phone call with Reuters, the chief communications officer said there was no material event which could have propelled the stock price.
But analysts and investors are optimistic that Orascom Telecom’s recent binding offer to buy out CI Capital, the investment arm of Commercial International Bank, and its plan to merge CI with Beltone, which it acquired in late November, will create a financial powerhouse that can compete with the likes of EFG Hermes. OTMT jumped 5.3%.
Dubai’s benchmark jumped 2.5% in the heaviest volume since June 2015. Trading activity picked up late in the session as local traders bought their preferred stocks, cutting the index’s 2016 losses to 1.8%.
Builders Drake & Scull and Arabtec, the two most traded stocks, added 7.4% and 1.7% respectively. Last week Drake & Scull posted a jump in fourth-quarter profit, while yesterday Arabtec reported a fourth-quarter loss which widened from a year earlier but narrowed from the previous quarter.
Abu Dhabi’s index rebounded 2.1%, trimming its loss in 2016 to 0.2%. The market was lifted by the real estate sector with developers Eshraq Properties and RAK Properties each advancing more than 3.0% in heavy trade.
Bahrain-based Islamic lender Al Baraka Banking Group dropped 1.8% despite reporting a 15% rise in fourth-quarter net profit on Sunday. The bank made a net attributable profit of $42mn and the board proposed paying a cash dividend of $0.02 per share and a stock dividend of 3 free shares for every 100 held. Bahrain’s main index edged up 0.2%.
Elsewhere in the Gulf, Kuwait’s index added 0.3% to 5,145 points, while Oman’s index edged up 0.5% to 5,437 points.