Beirut SE: Blom (1 month)
Current Year High: 1,526.31 Current Year Low: 1,168.36
Un Under the shadow of the non-event of St. Cloud that failed to generate any improvement to Lebanon’s crippling disease of politics, the Beirut Stock Exchange did what it has been doing in the first half of the year: hang on by its teeth, gums bleeding. The BSI capped at 1172.86 on Jul 26, July trading volumes were largely insignificant. Report-worthy movements in the banking sector included the competition among local banks to buy the domestic business of BLC from the Qatar Investment Authority and the acquisition of Banque de la Bekaa by Bank of Sharjah (BoS) for $25 million. BoS essentially acquired a license which it wants to use to build an operation in the Levant. As far as stock market confidence indicators go, first-half 2007 findings by the semi-annual MasterIndex survey gave 20.5 out of 100 points in consumer confidence to the BSE (data were collected in April). That’s a drop of 63% from six months earlier. Compared with other Arab markets in the survey, the BSE scored 60 to 74 points lower.
Amman SE (1 month)
Current Year High: 6,543.67 Current Year Low: 5,267.27
The Amman Stock Exchange Index closed at 5,682.08 points on July 26, some 177 points lower than its July 1 closing. In year-to-date sector performance, the financial services sector made the weakest showing, down by almost 11%. Hospitality, mining, and real estate are still up more than the general index YTD, banks are barely holding their ground. Heavyweight Arab Bank led trading volumes but its share price moved down 5% in the course of July. Noteworthy transactions included a $440 million block trade in stock of HBTF. Financial services firm First Jordan Investment, an affiliate of Kuwait’s Global Investment House, carried out the subscription for its $85 million initial public offering between July 10 and 23, about eight months later than announced in first plans for the step. Saudi food conglomerate Savola and real estate firm Tameer Jordan entered an agreement by which Savola is expected to acquire 5% of Tameer.
Abu Dhabi SM (1 month)
Current Year High: 3,705.32 Current Year Low: 2,839.16
Straying upwards but a little from its plateau in the mid 3,500 points, the ADSM index closed at 3574.54 points on July 26, less than 20 points better than its 3,556.21 points at the first of the month. Summertime vacation pressures pushed the first-half disclosure season into high gear from early in the month while trading volumes tended lower. While in Dubai the new banking partners Emirates Banking Group and National Bank of Dubai proceeded with their merger to become Emirates NBD on rationale of gaining more oomph and regional profile, local champion National Bank of Abu Dhabi released second-quarter results that showed a 16% increase in profits to $160 million, saying that domestic banking was its biggest growth driver.
Dubai FM (1 month)
Current Year High: 4,985.39 Current Year Low: 3,658.13
The Dubai Financial Market closed at 4332.31 points on July 26, its lowest stand in two months. Earlier in July, however, it had touched its highest level in over eight months, at 4549.4 points. Air Arabia started trading with high volumes but limited gains. Emaar Properties, whose first-half results were to the dislike of share buyers, was sent 7% lower between its July 15 results disclosure and July 26. Early in the month, the DFM released a list of 13 most actively traded stocks in the first half of 2007. Including usual suspects in real estate, finance, communications and transport, companies on the “More Active Stocks” list are given a higher ceiling of 15% as daily fluctuation limit; other stocks have a ceiling of 5%. An important non-event from an international equity angle was the decision by DP World to drop its listing plans on the London Stock Exchange, judging bond financing more advantageous than the intended IPO.
Kuwait SE (1 month)
Current Year High: 12,491.10 Current Year Low: 9,164.30
The Kuwait Stock Exchange soared on, reaching P/E levels that made some listed stock appear overpriced to regional and international analysts. Up by 24.08% from the start of the year, the KSE closed at a new record of 12,491.10 points on July 25. Its index gain in the course of the month amounted to 445.3 points, representing an increase of 3.7%. Financial firms provided serial cross border expansion announcements. Investment Dar received approval to establish an Islamic bank in Bahrain with $200 million capital. National Bank of Kuwait stated it is negotiating a deal to buy an unnamed bank in Turkey. Commercial Bank of Kuwait said it will buy 25% in a small Yemeni bank jointly with the IFC. Blue chip telecommunications stock MTC had a string of five sessions at the down limit after its second quarter profit disappointed investors but recovered some ground at the end of the month. On strong revenues from asset sales, KIPCO posted a 2.5 times higher net profit for the second quarter 2007 at $96.2 million.
Saudi Arabia SE (1 month)
Current Year High: 11,709.10 Current Year Low: 6,861.80
The SSE tried for another recovery before the full heat of the summer vacation. Although still trailing everyone else in the GCC as the only Gulf bourse ending July lower than its index level at the start of the year, the TASI improved rather nicely from 6,900.50 points on July 1 to a closing at 7,633.54 points on July 26. Sabic announced 42% higher Q2 net profit at $1.7 billion. The share price of Sahara Petrochemicals rose before a bonus share issue and slumped afterwards. Four new insurers entered the fold of listed firms and Prince Al-Waleed bin Talal’s Kingdom Holding, whose 5% initial public offering was covered two-and-a-half times by demand earlier in the month, announced its rather speedy start of trading on the SSE for July 29, which should make it the 100th company on the bourse. The Wall Street Journal, seemingly determined to ruffle some feathers in the desert kingdom, published a major story alleging links between Al-Rajhi Bank and terrorism finance.
Muscat SM (1 month)
Current Year High: 6,504.18 Current Year Low: 4,718.74
The Muscat Securities Market appeared a tad under the weather toward the end of July. The index advanced from 6,314.17 points on July 1 to a year and all time-high of 6,504.18 points mid-month before softening to 6431.31 on July 26. The market is also up by 15% year-to-date. Oman United Insurance reported a first-half net loss of $5.2 million, on account of claims related to cyclone Gonu. BankMuscat reported net profit of $104 million (44% up year-on-year); National Bank of Oman and Raysut Cement came in with first-half profit gains of 46% and 35% while several smaller firms also posted good results. Kuwait’s Global Investment House made a bid to buy 51% in Omani pipe maker Al-Jazeera Steel Products.
Bahrain SE (1 month)
Current Year High: 2,503.03 Current Year Low: 2,047.28
The Bahrain Stock Exchange was not to stand behind its larger neighbor in Kuwait and produced a record performance, soaring from 2410.87 index points at the start of the month to a new historic peak of 2,503.03 points on July 26. Although at all-time best mark, commotion over the good performance was noticeably less than similar successes had been hailed during the 2005/2006 GCC markets boom. Market heavyweight Batelco contributed to the market performance with respectable profit gains and announcement of a new regional expansion strategy which it termed “niche-growth.” A corporate Kuwaiti shareholder in Bahrain’s largest listed bank, Ahli United Bank, received an acquisition offer for his stake from International Bank of Qatar, a privately-held commercial and retail bank in Qatar with four branches.
Doha SM: Qatar (1 month)
Current Year High: 7,997.53 Current Year Low: 5,825.80
The Doha Securities Market lost a bit of steam in the second half of July. After a climb from 7,432.54 points on July 1 to near 8,000 points on July 9, the index retreated in the rest of the month to a July 26 closing at 7569.59. The market is still among the weaker performers in the GCC this year, up by about 6% year-to-date. Industries Qatar helped the DSM to some rosy moments towards the end of the month with a substantive improvement in first-half profit. IQ and QTEL are among Gulf stocks favored by investment analysts of Credit Suisse. DSM regulators announced that they will from this month on post all information on stock trades by executives and board members in listed companies on the DSM website and market monitors. Internationally, Qatar attracted attention with its ambition to buy UK supermarket chain, Sainsbury.
Tunis SE (1 month)
Current Year High: 2,712.33 Current Year Low: 1,909.26
The Tunisian Exchange registered negative movement that saw the Tunindex tumble 3% in the course of the month, from 2509.79 points on July 2 to 2437.21 points on July 26. After recording a historic peak in February, the bourse has not made any significant gains in four months and closed July on 4.55% up compared with the start of 2007. Market heavyweight SFBT traded lower after a 5-for-1 stock split on July 8; its share price weakened by about 12% in the two weeks afterwards. The market saw an initial public offering in July by industrial manufacturer Tunisie Profiles Aluminium. The company put 4.8 million shares, representing 16% of equity, on the market for $15.5 million. Subscription closed on July 24, with no oversubscription reported.
Casablanca SE All Shares (1 month)
Current Year High: 12,723.23 Current Year Low: 7,029.45
The Casablanca All Shares Index trained further in its quickstep sideways dance, starting the month at 11,374.11 points on July 2 and closing at 11,394.32 points on July 26. Initiating the exchange’s most significant primary market action in some time state-owned real estate firm CGI (Compagnie Generale Immobiliere) put 20% of its shares on the market in an initial public offering cum capital increase worth $428 million. Subscription closed on July 27. In industrial news, American paper manufacturer International Paper paid $40 million to buy the 35% stake in local sector company Compagnie Marocaine des Bois et Matériaux which it did not yet own.
Cairo SE: Hermes (1 month)
Current Year High: 74,964.86 Current Year Low: 49,705.98
After a month-long rally which saw the Hermes Index scale a new record at 74,964.86 points on July 10, CASE closed at 74,390.06 on July 26. Volume performers included the Orascom group companies in telecommunications and construction. Orascom Telecom Holding placed a formal $120 million bid offer to sector company Raya on July 22 but the firm rejected the offer as too low. More attention grabbers were in the banking sector, where CIB was reported in newspapers to be negotiating a merger with Arab-African International Bank (owned mostly by the governments of Egypt and Kuwait), which would create a new strong domestic banking player with 8% market share by assets. CIB shares rallied. In another development, the government said it would bust the chains of Banque du Caire and sell 80% of one of Egypt’s top banks. The move values Banque du Caire at above $2 billion and replaces a plan of merging it with Bank Misr, which would have been too costly in terms of money, network restructuring, and employment impact.
