Gulf markets mixed as investors await catalyst; Egypt extends gains

Gulf markets mixed as investors await catalyst; Egypt extends gains

Gulf markets were mixed on Monday as investors adjusted positions after recent gains and retail investors continue to increase risk despite a general lack of catalyst in regional markets, while Egypt's bourse hit a 14-month high.

September 4, 2012 11:20 by Reuters

Dubai’s index climbed 0.1 percent to finish at 1,548 points, up for a second session in the last seven.

“The market has been in a range for the past few sessions – retail (investors) perceive this level as an accumulation phase,” said Nabil Al Rantisi, managing director of MENA Corp. “Retail investors won’t sell unless the market moves up or they see selling pressure.”

Some institutions are selling, however, as retail investors buy. The market could correct to 1,510 levels this week, Rantisi added.

Regional catalysts will be hard to find until third-quarter earnings begin to trickle in from October.

This means investors will turn to international markets and the European Central Bank (ECB) policy meeting on Thursday for cues.

Markets have been expecting the bank to outline, and possibly offer, some details of its bond-buying scheme aimed at driving down borrowing costs for highly-indebted euro zone members such as Spain and Italy.

“Dubai is the best performing market in the Gulf. It’s toning back down a bit which puts it in a good position,” said Marwan Shurrab, vice-president and chief trader at Gulf mena Investments. “The problem in the UAE is liquidity, which needs to be tackled. It’s not encouraging new money to enter the market.”

In Qatar, the measure edged up 0.09 percent, trimming year-to-date losses to 3.6 percent.

Banks gained with Qatar National Bank up 0.2 percent, Masraf Al Rayan climbing 0.2 percent and Al Khalij Commercial Bank adding 0.5 percent.

Ezdan Real Estate rose 3 percent, trimming its year-to-date losses to 7.2 percent.

The developer asked shareholders to approve converting the company in a holding company called Ezdan Holding Group, it said in a bourse statement on Sunday.

An extraordinary shareholders meeting is set for Sept. 17 to vote on changes to the company’s articles of association.

Ezdan, the Gulf’s largest real estate firm with a market capitalisation of $14 billion, has claimed heavy volumes recently, with cross-trades of about 46 million shares per day over 10 days.

“Ezdan appears to be reshuffling the number of owned shares between several local institutions,” said Ahmed Shehada, head of trading at Qatar National Bank Financial Services. “If the tranches are going out of the majority shareholder’s stake, then we may see a more liquid stock which is a great move especially due to the size of the stock on the exchange.”

In Saudi Arabia’s, the index slipped for a third session since Wednesday’s 16-week high, with petrochemical and cement stocks the biggest drags.

Bellwether Saudi Basic Industries Corp (SABIC) slipped 0.8 percent, National Industrialization shed 0.6 percent and Southern Province Cement fell 1.9 percent.

Kingdom Holding shares dropped 5.6 percent, down for a second session from Saturday’s four-year high. It rallied sharply in three consecutive sessions and volumes spiked in a stock that traders often speculate in.

The insurance stock index eased 0.08 percent.

Investors are selling small-cap stocks that drove a recent rally and analysts fear the pull-back could be sharp because bluechips did not support the move higher.

Elsewhere, Egypt’s benchmark index climbed 0.7 percent, closing at its highest level since June 2011.

National Societe Generale Bank, unit of France’s Societe Generale, surged for a second session, closing 10 percent higher, since news that Qatar National Bank is in talks to buy a controlling stake.

The Paris-based bank, which owns 77.17 percent of Egypt’s said the talks on selling NSGB were preliminary.