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Spain woes to weigh on Gulf States
While the Eurozone crisis may sound like an alienated one, its effects can cover the GCC region with the NBK in focus
July 24, 2012 11:09 by Reuters
Gulf markets are seen subdued on Tuesday amid a weak global backdrop and thin news flow but stock-specific activity is likely as investors react to earnings.
National Bank of Kuwait (NBK) said it will increase its stake in Boubyan Bank to more than 58 percent but failed to secure full backing for its takeover of the Islamic lender.
NBK last month offered to pay 0.63 dinars ($2.24) per share for the 52.7 percent of Boubyan.
“The offer is very over-valued but at least it’s out of the way because it’s something NBK wanted for a long time,” says Amer Khan, fund manager, Shuaa Asset Management.
“I don’t think there are many institutional investors in Boubyan because of structural problems in Kuwait. The price should drop after the options for tender shares expired if NBK is not buying anymore – 0.63 for the bank is pricey.”
Wataniya, the country’s No. 2 telecoms operator, reported a 49 percent drop in second-quarter profit on Monday, hit by foreign exchange losses from its Algeria unit and increased domestic competition.
Wataniya’s shares have been suspended since late June when Qatar Telecom (Qtel) offered to buy the remaining 47.5 percent stake it does not already own in the Kuwaiti firm.
In other news, Aluminium Bahrain, which owns the world’s fourth-largest aluminium smelter, said on Monday it hired BNP Paribas to advise on financing options for a proposed $2.5 billion expansion plan to add a sixth production line.
Asian shares inched higher on Tuesday after the previous day’s deep losses as a surge in Spain‘s borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone’s fourth-largest economy to seek a bailout.
Brent crude remained steady above $103 per barrel on Tuesday as China, the world’s top energy consumer, showed signs of improvement in its economy. (Reporting by Nadia Saleem; Editing by David French)