Results still driver for UAE markets
Expectations in the Middle East are high for good first-quarter earnings, while cues from China are negative.
April 23, 2013 6:43 by Reuters
Expectations for good first-quarter earnings should continue to fuel positive sentiment towards markets in the United Arab Emirates, although weak cues from Asia could hurt the rest of the Gulf.
Both Dubai and Abu Dhabi hit multi-year highs on Monday as investors positioned themselves for results, with banks in particular attracting attention.
“The expectation of good Q1 numbers has boosted the markets and this flow should continue, as long as the turnover is good,” says Marwan Shurrab, vice president and chief trader at Gulfmena Investments.
Volumes have been subdued in recent days, in particular in Abu Dhabi, and Shurrab believes that any sustained move up needs good turnover to support it.
Abu Dhabi-listed Dana Gas holds a shareholder meeting on Tuesday to vote on the restructuring plan for its $920 million sukuk, which the company failed to repay last year. The plan is widely expected to pass.
In Saudi Arabia, Petro Rabigh will be watched once more, after it ended the previous session limit down. The firm reported on Sunday a big loss in the first quarter and warned second-quarter earnings would be hurt by a 12-day shutdown for maintenance at its ethane cracker.
Elsewhere, Industries Qatar will be in focus after it reported an estimate-beating 36.8 per cent hike in first-quarter net profit after Monday’s market close.
Cues from Asia are negative. Shares and other riskier assets lost ground after a preliminary reading showed manufacturing growth in China slowed in April, highlighting recent market concerns about global growth prospects.
The flash HSBC Purchasing Managers’ Index for April also weakened oil prices, with Brent crude slipping towards $100 a barrel, due to fears over the outlook for fuel demand in the world’s second largest oil consumer.