Saudi, Dubai stock markets pull back after rallies, Egypt nears 2015 low

Monday 27-04-2015 05:33 PM
Saudi, Dubai stock markets pull back after rallies, Egypt nears 2015 low

A man rests at his desk at the Egyptian stock market in Cairo, November 25, 2012. Egyptian share prices plunge, with the benchmark index losing nearly 10 percent in the first trading session since President Mohamed Mursi ignited a political crisis by expanding his powers. REUTERS/Asmaa Waguih


By Olzhas Auyezov

DUBAI, April 27 (Reuters) - Gulf stock markets were mixed on Monday as strong oil prices supported investor sentiment but Saudi Arabia and Dubai pulled back slightly from 2015 highs hit in the previous session. Egypt remained depressed by tax and foreign currency concerns.

Brent crude slipped less than 1 percent to around $65 per barrel while Gulf stock markets were open on Monday as the U.S. dollar strengthened. But signs that U.S. shale oil output may have started to fall put a floor under prices.

The main Saudi stock index slipped 0.2 percent to 9,711 points and Saudi Telecom was the main drag, dropping 2.1 percent as its shares stopped carrying a quarterly dividend.

The Saudi index continues to struggle with major technical resistance in the 9,572-9,745 point area, where the 200-day average roughly coincides with the March peak.

Monday saw profit-taking in several stocks that had outperformed recently. Oil shipper Bahri, for instance, dropped 2.0 percent after jumping 6.8 percent in the two previous sessions.

But petrochemicals giant Saudi Basic Industries, which was the most traded stock, added 1.2 percent and most other stocks in the petrochemical sector also rose.



Dubai's index edged down 0.5 percent and bourse operator Dubai Financial Market (DFM) was one of the main drags, dropping 2.8 percent.

DFM, the only listed stock exchange in the Gulf, reported a 69 percent drop in first-quarter net profit as trading volumes on the bourse fell sharply. The firm made 67.7 million dirhams ($18.4 million) in the quarter while HSBC had forecast DFM would earn 78.0 million dirhams.

Bahraini investment firm Gulf Finance House dominated Dubai trading volumes again, but pulled back 1.7 percent after surging its daily 15 percent limit on Sunday.

Emaar Malls jumped 2.0 percent after Dubai brokerage Arqaam Capital said in a report that it expected index compiler MSCI to add the stock to its emerging market index in the upcoming semi-annual index review. MSCI will announce the changes on May 12 and implement them from June 1.

Abu Dhabi's market added 0.2 percent thanks to Union National Bank, which surged 4.4 percent after the same Arqaam report identified it as another likely inclusion.

Qatar's index rose 1.3 percent in a broad rally. Barwa Real Estate was one of the main supports and jumped 3.0 percent after saying it would publish first-quarter results on Wednesday.

Two other firms in the sector, Ezdan Holding and United Development rose 0.6 and 3.4 percent respectively. Ezdan posted a 13.4 percent increase in first-quarter profit on Sunday, while United Development said its profit had risen 8.5 percent.

Egypt's index declined broadly, falling 1.6 percent to 8,494 points and approaching its 2015 low of 8,450 points.

Osama Mourad, chairman of Cairo-based Acumen Securities, said the market's persistent weakness was mainly due to regulations issued this month which introduced taxes on capital gains and dividends. The new rules have been criticised by the head of the Egyptian stock exchange among others; he said they were too complex.

"The government is not realising the importance of capital markets," Mourad said, adding that foreign currency shortages were another concern.

"Expectations were raised regarding the arrival of $6 billion in deposits (from oil-rich Gulf nations). However, the central bank has not announced what it plans to do with them and companies are suffering from the shortage of foreign currency."

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