Sunday, 04 November 2012 20:06
DUBAI: Gulf bourses were mostly lower on Sunday with political tension weighing on Kuwait, while Saudi Arabia's measure gained in thin trade.
Kuwait's index slumped to a new eight-year closing low ahead of a major demonstration planned by the opposition later in the day. The market finished 0.1 percent lower.
The opposition said it would would press ahead with the march to protest against new voting rules, while the government warned it would not tolerate unsanctioned demonstrations.
Some protests in recent weeks have seen clashes between police and demonstrators.
"Retail investors were nervous today - we have another protest tonight. But I don't think too much will happen because a lot of security forces have been sent out," said a Kuwait-based trader who asked not to be identified.
Nine of the 10 largest stocks by market value closed flat, with smaller stocks facing the brunt of the selling pressure. Government-linked funds were seen buying larger blue chips to support the market during some periods of market weakness last month and investors think they may do
so again, though there was little if any such buying noted on Sunday.
National Ranges was the most active stock, falling 2.8 percent. Ithmaar Bank shed 1.1 percent.
"Not many people are selling, trading values are low people are scared to leave or to enter the market," said Fouad Darwish, head of brokerage services at Global Investment House.
In contrast to other Gulf countries, few Kuwait companies have so far reported third-quarter earnings, apparently because they want to limit the negative impact from the political tensions on their stocks, he added.
They seem to be calculating that politics-related selling is less likely if investors are still hoping for positive third-quarter earnings surprises.
In Qatar, the bourse slipped from its six-week high as investors booked recent gains, with Industries Qatar the main drag. Industries Qatar fell 2.4 percent to 150.9 riyals, down from Thursday's four-year high suggesting it has not cleanly broken major technical resistance at the January 2011 intra-day high of 154.50.
If the stock falls on Monday, that will create a bearish engulfing pattern on the daily candlestick chart, a classic sign of the end of an uptrend for the short term.
"IQ's price is on the upper end, but they are also getting into a lot of projects so the bar will be raised," said Yassir Mckee, wealth manager at Al Rayan Financial Brokerage.
"They have the potential to break the 52-week high but trading is a little bit speculative - materialisation of the projects will take some time."
Doha's index ended 0.5 percent lower at 8,565 points in its largest one-day decline since Sept. 26.
The market's year-end target is near the 8,600 level, Mckee added. "Everybody is waiting for the big-ticket projects and new construction but I don't see that happening this year. People will try to cash in on the (year-end) dividends, so there won't be a lot of selling."
Qatar Electricity and Water shed 0.7 percent and Qatar National Bank slipped 0.3 percent.
Elsewhere, Saudi Arabia bucked the regional trend. The index rose 0.2 percent, up for a third straight session, but trading volumes were low as investors stayed cautious.
The insurance sector rose 2.4 percent, accounting for a third of all trading volume on the bourse. Short-term retail investors often target insurance stocks because they are plays on domestic demand, avoiding petrochemical and banking shares which are more affected by global trends.
"Right now it's a wait and see period - there's more cautious behaviour from investors right now because of global events like the US elections," said Muhammad Faisal Potrik, research analyst at Riyad Capital.
"We could see some improvement since the market did get bogged down. Petchem prices have improved on average since the last quarter and Q4 is likely to be better."
Petrochemical stocks edged higher, with Saudi Basic Industries Corp (SABIC), the Gulf's largest listed company, adding 0.3 percent.
In the United Arab Emirates, Abu Dhabi's measure dipped 0.2 percent, easing away from a 15-month high.
Heavyweight Abu Dhabi Commercial Bank fell 1.5 percent. The lender posted a quarterly profit decline, missing by a considerable margin the forecasts of analysts who had predicted, on average, a 23-percent increase in quarterly
Dubai's benchmark closed 0.3 percent lower, trading within a 20-point range since last Monday.
Dubai Financial Market, the only listed Gulf bourse, fell 1.0 percent. It said its third-quarter net loss narrowed to 1.7 million dirhams ($463,000) from 9.3 million in the same period last year.
Copyright Reuters, 2012