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Global stocks, oil sap sentiment on Gulf markets....
Released on - Tuesday,27 October , 2009 -17:36 17
DUBAI - Slipping global stocks and a fall in the oil price dampended investor sentiment across Gulf Arab markets on Tuesday, leading to declines on most regional bourses.
A decline was triggered by market retreat in the United States on Monday as well as three days if falls in oil prices.
In the United Arab Emirates, Dubai's index ended 0.8 percent lower after seeing its largest one-day increase in four weeks on Monday.
Real estate-related stocks retreated. Arabtec slipped 2.5 percent and Deyaar fell 2.4 percent.
"Yesterday, we saw that oil was well down and the U.S. market closed over 100 points down," says Ayman el-Saheb, Darahem Financial Brokerage director of operations.
"This scared some investors here and they decided to book profits."
Third-quarter earnings announcement from Abu Dhabi Commercial Bank (ADCB) weighed on the emirate's index late in the session. The enchmark ended 0.7 percent lower at 3,145 points.
Shares in ADCB dived 8.3 percent after the UAE's sixth largest lender reported a 90 percent decline in quarterly profit, on the back of hefty provisions.
National Bank of Abu Dhabi also reported quarterly results towards the end of the session. Trading on the stock was halted ahead of the results.
Abu Dhabi's largest lender reported a jump of 41 percent in quarterly profit, just short of analysts' average expectations.
After the close of trading, Real estate heavyweight Aldar Properties reported a 43 percent drop in third-quarter earnings based on Reuters calculations.
"Investors are sitting on the sidelines, waiting for corporate results," said Chamel Sahmy, regional senior sales trader at Beltone Financial, indicating a likely reaction in Wednesday's trading session.
A similar picture was painted across other regional bourses. The Saudi measure, which is more correlated to oil prices, slid 0.5 percent to 6,533 points, with most major stocks witnessing selling pressure.
Samba Financial Group, the second largest listed Saudi bank, retreated 3.5 percent.
"The Saudi market is more correlated to global oil prices," says Moussa Haddad, head of Middle East equity trading desk at NBAD.
"There is no major news that is driving the market down today. It is close to the end of the month when some investors start closing positions, nothing significant in that."
Indices in Oman, Bahrain and Qatar all slipped as a cautious attitude curbed investor enthusiasm.
Although third-quarter earnings from Oman Cement Co beat expectations, market sentiment remained subdued.
"At the current time, traders are still very cautious of global and regional markets," said Adel Nasr at United Securities.
Only Kuwait's benchmark managed to end slightly higher, with investors picking up banking stock which were unceremoniously dumped in Monday's session.
National Bank of Kuwait rose 1.6 percent after its quarterly earnings beat forecasts. Kuwait Finance House, climbed 1.6 percent after its chief executive said provisions, which stood at $1.6 billion, were declining.
Analysts say the sideways trend in Gulf Arab markets could continue, with investors watching international developments closely for positive indications.
TUESDAY'S HIGHLIGHTS
DUBAI
The benchmark retreated 0.8 percent to 2,319 points.
ABU DHABI
The index slipped 0.7 percent to 3,145 points.
SAUDI ARABIA
The measure declined 0.5 percent to 6,533 points.
OMAN
Muscat's benchmark retreated 0.5 percent to 6,490 points.
QATAR
The index slipped 0.3 percent to 7,315 points.
BAHRAIN
The index declines 0.3 percent to 1,539 points.
KUWAIT
The measure climbed 0.3 percent to 7,476 points.
Source: Reuters