[2008-06-03]  Dubai index drives Gulf stock exchanges higher
Dubai shares led six out of seven Gulf markets higher as investors continued to ramp up portfolios in the new month. Only Doha closed in the red. EFG Hermes is broadly positive on the GCC as a whole over second half 2008, it said in a Sunday report.
Dubai shares closed up 1.3% to 5813.04, led by Dubai Investments, up 4% to 3.94 dirhams, and Amlak Finance, up 3.8% to 5.15 dirhams.
Amlak on Sunday said it will no longer complete the purchase of a 1.65bn dirhams residential tower at the Dubai International Financial Center, or DIFC.
Amlak said “it was not able to complete the purchase due to the inability of First Dubai Real Estate Development Co, a unit of Kuwait’s Mazaya, to honour the terms and conditions stipulated in the memorandum of understanding.”
Amlak will penalise the Kuwaiti firm, forcing it to pay 82mn dirhams, and called for a refund of its down payment, the company said. Amlak ended up 2.9% on Sunday.
First Dubai said yesterday negotiations are still ongoing with Amlak and the DIFC over the sale.
Abu Dhabi market rose 0.6% to 5092.87, helped by real estate and banking shares.
Investors are building fresh positions in June after selling last week as they tried to align their portfolios with the regulator’s monthly margin limits, said a Dubai-based trader.
EFG Hermes said in report on Sunday that it expects the UAE stock markets to pick up and gather momentum in the second half of 2008.
The Saudi market ended up 0.1% to 9516.57, led by Emaar the Economic City, up 9.9% to 25 riyals.
Emaar said on Sunday it sold 95% of the Esmeralda Suburb villa units for 171mn riyals.
Heavyweights Saudi Basic Industries Corp, up 0.4% to 140.25 riyals, and Al Rajhi Bank, up 0.6% to 88 riyals, supported gains in the overall market.
EFG Hermes said in the report: “Valuations are looking attractive with large caps trading at a substantial discount to the broader market once more. With earnings growth expected to accelerate into second half 2008 and 2009, we see support for a strong sustained recovery in the index going forward. Also, any clarity regarding foreign ownership allowance would result in a considerable rally.”
The Kuwait market, the Gulf’s second largest, gained 0.8% to 15117.90 at close, led by bellwether Zain, limit up 6% to 1.760 dinars. National Industries Group rose 6% to 1.400 dinars.
The market traded 0.1% lower on Sunday as investors preferred to wait and watch for the election of a new speaker on the first session of Kuwait’s new parliament.
Jassem Al-Kharafi was reelected parliament speaker later in the day, state-run news agency KUNA reported on Sunday.
EFG Hermes said in a June 1 report: “We find the market fundamentally less appealing versus other GCC markets, however, we see potential for a strong liquidity driven rally if the capital gains tax is removed. If there is no clarity on this issue in the near term, we see a risk of the small and mid cap driven rally unraveling. We would recommend a stock specific stance focusing on attractive valuation and higher quality earnings growth.”
Bahrain’s market was up 0.2% to 2882.45, led by insurance firms.
The Muscat stock market closed 0.9% higher at 11692.23, an all-time high.
Oman International Investment and Investment Co, or Ominvest, was the top riser, up 9% to 1.099 rials. The company said yesterday it sold 17.32mn shares in Muscat Finance Co for a cash consideration of about 6.9mn rials.
This sale has resulted in a profit of about 5.84mn rials for the parent company and 4.31mn rials in the group financial statements, it said. Ominvest did not disclose the buyer’s name. – Zawya Dow Jones





Source: © Gulf Times Newspaper, 2008