Dubai's index falls to six-week low

Dubai's index slipped to a six-week closing low on Thursday and other Gulf bourses also fell as investors cut positions ahead of the weekend amid uncertainty in global markets. Selling pressure in small-cap stocks led Dubai's benchmark to a fifth straight decline, down 0.3 percent to its lowest finish since March 3. Late buying helped the index recoup some intraday losses.
"The downward pressure came from expectations of a sell-off in international markets on concerns over Spain's bond auction," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments. "But when they saw it went well, some late buyers came in to pick up securities that were sold-off heavily during the day." Spain managed to sell 2.5 billion euros ($3.3 billion) of bonds at auction on Thursday, as much as it wanted, while global markets were steady. Dubai mortgage lender Tamweel fell 4 percent, extending declines since it posted a 33 percent fall in first quarter net profit.
National Central Cooling (Tabreed) slipped 2.5 percent and Emaar Properties lost 0.3 percent. Abu Dhabi's index declined 0.5 percent, down for a fifth session in seven. Aldar Properties and Sorouh Real Estate were the main drags, falling 3.5 and 2.7 percent respectively. This pair accounted for half of all shares traded on the index. In Qatar, Doha Bank dropped 2.7 percent despite posting an estimate-beating first-quarter net profit of 389.9 million riyals ($107 million).
"Doha Bank's stock price rallied sharply in the second half of 2011 on expectations of significantly high growth prospects," said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. "The numbers aren't as strong as they were expected to be in order to sustain such high price levels, so we're seeing some profit taking." Other banks also slipped, with Qatar Islamic Bank and Commercial Bank of Qatar down 0.7 and 1.5 percent respectively.
Qatar Gas Transport (Nakilat) declined 4.5 percent, after going ex-dividend. The firm is expected to report its earnings on Thursday. EFG-Hermes estimates Nakilat will post a 10.6 percent rise in first-quarter profit. Doha's index dipped 0.9 percent to 8,639 points, its lowest since March 21. Aboulhosn said the index has strong support at the 8,600 level, trading in a technical consolidation pattern.
Elsewhere, Oman International Bank (OIB) gave back earlier gains to end flat as investors give a mixed response to the news that Europe's biggest bank HSBC will merge its Oman business with the lender. Shares in OIB had risen to a 15-week high in early trade. HSBC will hold a 51 percent stake in the enlarged operation, which will be named HSBC Bank Oman SOAG.
"Whenever the news becomes reality, investors will get rid of the stock," said Adel Nasr, United Securities brokerage manager. Oman's benchmark slipped 0.06 percent, easing from Wednesday's 10-month high. Investors booked gains from a recent rally. Bank Muscat slipped 0.6 percent, Al Anwar Holding dropped 2.6 percent. Oman National Investment Corporation supported the index, rising 5 percent.