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Euro Zone woes deepen; Abu Dhabi banks in focus
Abu Dhabi Commercial Bank reported a second-quarter profit of 733 million dirhams, topping forecasts after the lender took lower provisions
July 25, 2012 1:16 by Reuters
Renewed worries over the euro zone are likely to weigh on Gulf sentiment on Wednesday, while estimate-beating results by Abu Dhabi banks may do little to attract new buyers.
Asian shares are down as soaring borrowing costs deepened concerns Spain might need a bailout, while Greeceappeared unlikely to meet terms conditional to its aid package.
In the United Arab Emirates, Abu Dhabi Commercial Bank reported a second-quarter profit of 733 million dirhams ($199.6 million), topping forecasts after the lender took lower provisions.
National Bank of Abu Dhabi, the UAE’s largest lender by market value, reported a 2-percent rise in quarterly profit, meeting forecasts.
First Gulf Bank edged higher on Tuesday after it posted a 14 percent rise in second-quarter profit, beating expectations.
“Some banks are witnessing tighter margins due to the low interest rate environment, others are reducing loan loss provisions as a result of higher asset quality,” says Sleiman Aboulhosn, assistant fund manager at Al Masah Capital.
“Overall, I think the small earnings beat is unlikely to have a pronounced effect on stock prices this week. Volumes have plummeted as many investors are absent and the market lacks momentum, so we hesitate to day-trade in this environment.”
Trading slumps on Gulf markets in the summer as many participants escape the searing heat, while the Muslim holy month of Ramadan, which started on Thursday evening, exacerbates the lack of investor interest.
In Doha, Vodafone Qatar posted a narrower quarterly loss, beating an analyst forecast.
Brent crude slipped by 48 cents to $102.94 a barrel by 0537 GMT.