DUBAI
BANKS helped lift the Abu Dhabi and Dubai bourses on Sunday as investors bet on a fundamental improvement in the sector, while most other regional markets also gained.
The UAE capital’s index climbed 0.6 percent, up for a sixth straight session.
“There is a positive outlook on the United Arab Emirates because they will benefit from Abu Dhabi’s infrastructure spending and Dubai’s recovery in macro economics,” said Ali Adou, portfolio manager at The National Investor.
“At current valuations, I would expect a rotation into banks from real estate stocks.” National Bank of Abu Dhabi and First Gulf Bank rose 0.4 and 2.2 percent respectively.
Adou said foreign investors usually select top-tier banks such as FGB and then move to other sectors.
Dubai’s benchmark advanced 0.1 percent, having dropped in the last two sessions.
Shares in Emirates NBD rose 2.3 percent, resuming gains as bargain hunters returned. The stock fell on Thursday in post-dividend selling.
Shuaa Capital ended 1.2 percent higher in volatile trading. The stock jumped 7.2 percent initially on reports it planned to pay a cash dividend of 6 fils per share, before giving back most of those gains after Shuaa denied the reports.
In Saudi Arabia, the market climbed 0.4 percent to a four-week high but the index remains trapped in the tight trading range it has inhabited since mid-January.
“We were expecting a sideways trend in most of the first half of 2013,” said Asim Bukhtiar, head of research at Riyad Capital.
“After first-quarter earnings, we may see some movement but there is no clear direction at the moment.” The heavyweight sectors of banks and petrochemicals were the main support.
Saudi Arabian Fertilizers added 1.8 percent and Al Rajhi Bank gained 0.4 percent.
Small-caps dominated trading, signalling investors were looking for quick gains in the absence of other drivers.
Property developer Dar Al Arkan and telecom firm Zain Saudi were the two most heavily traded stocks on the exchange, advancing 2.5 and 1.8 percent respectively.
Shares in Saudi Telecom Co (STC) fell 2 percent, extending 2013 losses to 7.6 percent, after the former monopoly’s chief executive, Khaled al- Ghoneim, resigned after less than a year in the job.
“This comes as a surprise and it’s too early to say how it will affect the company,” Bukhtiar said, adding that outlook on STC will be dependent on the new CEO and the future direction.
Elsewhere, Qatar’s measure slipped 0.1 percent, down from Thursday’s two-week high. Qatar National Bank and Qatar International Islamic Bank declined 0.9 and 2.5 percent respectively.
In Egypt, the main benchmark ended near-flat.
Heavyweight Orascom Construction Industries slipped 0.4 percent to a fresh three-month low as the company battles with the government on tax charges.
Non-Arab foreigners continued to be net sellers on the bourse amid a worsening economic outlook.
Meanwhile, Oman’s benchmark rose 0.8 percent, its sixth consecutive gain, as banks supported. Bank Muscat and Bank Dhofar advanced 1.6 and 1.5 percent respectively.
Kuwait’s index resumed its positive trend, gaining 0.2 percent, after declining on Thursday for the first time in 14 sessions.
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