DUBAI: Gulf equity markets diverged in early trade on Sunday with corporate news buoying Dubai's market and Abu Dhabi's index weighed down by some of last week's top movers.
Dubai's index rose 0.4 percent, buoyed by a 10.8 percent jump in Shuaa Capital after the investment firm announced that Abu Dhabi Financial Group (ADFG) had carried out a previously announced acquisition of 48.36 percent of the firm from Dubai Banking Group, a subsidiary of Dubai Group, for 0.705 dirham a share.
Although the purchase price was well below the market price, some investors are betting ADFG will develop Shuaa into a much bigger company.
Shares in GFH Financial Group were up 2.7 percent after the Bahrain based company announced along with Abu Dhabi Financial Group (ADFG) that they have appointed a chief executive, Talal al-Zain, for their Islamic finance joint venture in Abu Dhabi's financial free zone.
Abu Dhabi's stock market index was down 0.7 percent as Union National Bank and Abu Dhabi Commercial Bank , which were rumoured to be the next pair of banks to merge, traded lower before being suspended for trade. UNB was down 2.0 percent and ADCB was down 2.3 percent.
Similarly Abu Dhabi Islamic Bank fell 0.8 percent before being suspended on market speculation that it will merge with Bank Alhilal.
Trade in Abu Dhabi Islamic Bank and Abu Dhabi Commercial Bank resumed after both banks said in separate statements that they were not in any merger talks.
In Saudi Arabia, the general market index was up 0.2 percent after 45 minutes of trade with the petrochemical sub-index adding 0.4 percent on firmer crude oil prices. Brent futures settled at $46.86 on Friday, up roughly 5 percent for the week.
Banking shares, however, were a mixed bag with the majority of large-cap lenders, which have led the index higher over the past month, dipped on profit taking. Shares in Saudi Hollandi were down 0.8 percent.
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