Guess what percentage of companies actually reward staff for innovation…August 31, 2015 3:16
Saudi drops to 3-week low; Emaar lifts Dubai
Shares in Zain Saudi slumped to a record low on Monday amid a slow initial take-up of its rights issue, while Saudi Arabia's index fell to a near three-week low. But Emaar Properties lifted Dubai's bourse.
July 17, 2012 10:17 by Reuters
Shares in Zain Saudi slumped to a record low on Monday amid a slow initial take-up of its rights issue, while Saudi Arabia’s index fell to a near three-week low. But Emaar Properties lifted Dubai’s bourse.
Shares in Zain Saudi sank 4.4 percent to 11.90 riyals. The telecom operator’s $1.6 billion rights issue, which closes on Tuesday, has sold only 54 percent of shares available, lead underwriter Banque Saudi Fransi (BSF) said. Parent firm Zain and underwriting banks are set to meet any shortfall.
“People are playing it as an arbitrage opportunity, selling it at the current price and buying it at 10 riyals (the rights issue price),” said Ahmed Raza Khan, head of research for asset management at Riyadh-based MEFIC Capital.
“Anyone not afraid to lose the percentage holding in their portfolio wouldn’t mind selling the stock and subscribing to the rights. After the rights issue closes, there might be some selling pressure again.”
Zain Saudi’s rights issue is being used largely to ease some of its debts.
Saudi banks were lower with Alinma Bank down 2.6 percent and Bank Aljazira falling 2.7 percent.
The kingdom’s main index slipped 0.3 percent in thin trade to 6,641 points, its lowest close since June 27.
Elsewhere, Dubai bellwether Emaar Properties hit an 11-week high ahead of the developer’s quarterly earnings, expected in coming weeks. This lifted the emirate’s bourse to its highest close since May 9.
Three analysts polled by Reuters expect the developer to post an average profit of 516.3 million dirhams ($141 million), which would be a 106 percent increase on a year earlier.
“People are expecting better results this quarter than usual,” said Mostafa Yousry, Cairo-based equity trader at EFG-Hermes. “Hotels have been doing pretty well in 2012 so far. So a nice piece of revenue should be rolling in from that as well.”
Shares in Emaar rose 2.5 percent to 3.23 dirhams, their highest close since May 1.
“Emaar is heading to 3.35, its next resistance level, while support will come in at 3.00,” said Mohabeldeen Agena, head of technical analysis at Cairo’s Beltone Financial. “The rally is backed by strong volumes.” The stock peaked around 3.35 dirhams in April 2011 and again in April 2012.
Contractor Arabtec added 2.8 percent and budget carrier Air Arabia rose 1.7 percent, outperforming the benchmark, which climbed 0.9 percent.
Elsewhere, shares in Bank Muscat rose 2.9 percent, up for a third session since last Wednesday’s two-year low, after the lender reported higher-than-expected earnings. It made a second-quarter profit of 35 million rials ($91 million), according to Reuters calculations.
In Egypt, the main index gained 0.5 percent, as bargain hunters stepped in after recent declines spurred by the failure of the new president to appoint a government more than three weeks since his election win.
Traders say the market is focused on the need for a cabinet that can tackle the country’s urgent economic problems and that shares will likely rally in relief once President Mohamed Mursi announces a new prime minister.