As regional stock markets wound their way through first-quarter earnings announcements, Gulf markets tended to dip in the early part of week 16 and index gains were reserved for the second half of the week in five of the seven stock exchanges of the Gulf Cooperation Council.
The Gulf
The Saudi, Qatari, Bahraini and both exchanges in the United Arab Emirates followed this pattern but with the distinction that both Emirati bourses ended the week with net drops while the QE Index was the Gulf’s significant gainer – on Thursday temporarily rising to a new post 2005 high.
The Muscat Securities Market’s MSM 30 moved steadier than these five indices and achieved its 0.5 percent weekly net gain in tiny increments. The Kuwaiti market on the other hand dropped 0.9 percent on Thursday and tied with the Dubai Financial Market (DFM) for the week’s biggest percentage loss, at 1.6 percent each.
While the DFM Index had its strongest single-day drop in a month on Monday and another bad day on Wednesday, the Abu Dhabi Exchange (ADX) experienced an equal 1.7 percent fall over the first three days of the week. However, the ADX recovered most of this loss on Wednesday and Thursday, as the market was boosted by news from state-owned investment fund Mubadala. The fund, which holds local and overseas stocks, reported a full-year 2013 net profit of $395 million, three times of what it made in 2012.
In other news from the GCC markets, companies listed on Saudi Arabia’s Tadawul reported mixed first-quarter results. Saudi banks Samba, Riyad, Saudi British, and Saudi Fransi disclosed year-on-year net profit growth between 7.1 percent and 25 percent but the kingdom’s top publicly traded bank, Al Rajhi, reported a 16.9 percent lower profit which according to Reuters came in significantly below analyst predictions.
Banking and property stock were the usual high-profile actors on GCC exchanges. Emaar Properties, which broke the 10-dirham ($2.7) mark in early April, in week 16 eased off a bit from its highest reading since the burst of the UAE property bubble in 2008. Aldar Properties, the majority state-owned developer that dominates the real estate segment on ADX, started the week above 4 dirhams per share for the first time in four years. The company made an unspecific announcement on April 6 about plans to list a subsidiary. In Saudi Arabia, the stock price of developer Dar Al-Arkan strengthened in week 16 after seeing share price losses in the first half of April. The stock especially moved higher as the company announced 4.3 percent higher net profit (y-o-y) for the first quarter.
Other factors to influence the markets were rumors of mergers in the Saudi insurance sector and in the Qatari financial sector along with analysts’ musings on which individual companies on the Dubai, Abu Dhabi, and Doha exchanges will be included in the MSCI emerging market indices as of June and also what demand benefits the expected increase in weighing of Kuwaiti stocks in the MSCI frontier market index might generate.
North Africa and the Levant
Property and financial stocks along with political reconfirmation of military strongman Abdel-Fattah El-Sisi as likely easy winner in the end-of-May presidential elections in Egypt led the Egyptian Exchange to regain territory in a 2.6 percent weekly gain of the EGX 30 index that made the index the region’s best performer in week 16 and brought index levels back up above 8,000 points. According to sources cited in Al Ahram online, the market was pushed higher by financial firms Pioneers Holding and EFG Hermes and by developer Talaat Moustafa Group.
The Tunindex continued a slide that started on April 10 and ended the week 1.2 percent down, making the Tunisian Stock Exchange the period’s worst performer in North Africa and the Levant. Casablanca’s MASI fell by 0.5 percent and the ASE Index of the Jordanian bourse moved sideways with small daily variations and minor volumes.
The trading week on the Beirut Stock Exchange, reduced to four days because of Easter observances, was truncated mainly in terms of investor attention as the country focused on the charm offensives of contenders for the presidency. Solidere, the sole property stock on the BSE, is not yet ready to announce any figures for 2013 as General Manager Mounir Douaidy told Executive in an interview on April 16 (full interview to be published in Executive’s May issue). While Douaidy said that that company’s 2013 results should be better than the sharp drop in profits seen in 2012, he alluded to hopes for a political upswing, pointing out positive political developments as major upward influences in the stock’s past.
