Bourses in Qatar, Egypt and the United Arab Emirates edged up on Monday while Saudi Arabia's largest listed company, Saudi Basic Industries, dragged down that market after two of its subsidiaries posted disappointing quarterly earnings. The Doha benchmark added 0.8 percent after slipping as much as 0.5 percent earlier in the session. Qatar Islamic Bank was among the main supports, adding 1.5 percent as it prepared to announce its quarterly results.
After trading closed, the lender posted a 15 percent jump in second-quarter net profit to 389.6 million riyals ($107 million), beating analysts' average estimate of 348.8 million riyals. Another Islamic lender, Masraf Al Rayan, slipped 0.2 percent after saying it had agreed to sell its 50 percent stake in Seef Lusail Real Estate Development Co to the real estate arm of Qatar's sovereign wealth fund.
Players do not expect major moves in the market in coming days or even weeks; it is consolidating after a sharp drop in June and a subsequent rebound earlier this month. Many companies have yet to publish quarterly results and trading activity is lower than usual during the Muslim holy month of Ramadan. "We should be in the phase of consolidation, especially in the UAE and Qatar, and it might take a while before we see any movement," said Ali Adou, portfolio manager at The National Investor in Abu Dhabi.
Dubai's bourse edged up 0.7 percent on Monday. Air Arabia jumped 2.9 percent to 1.44 dirhams after brokerage Naeem on Sunday raised its target price for the stock to 1.67 dirhams from 1.21 dirhams with a "buy" recommendation. Shares in construction firm Drake and Scull rose 1.3 percent after its shareholders approved issuing a convertible bond worth 55 million dirhams ($15 million) to allow a strategic investor to buy into the company.
Abu Dhabi's index added 1.5 percent on the back of large lenders National Bank of Abu Dhabi and First Gulf Bank, which rose 4.1 and 2.7 percent respectively. Shares in Dana Gas surged 8.2 percent, continuing a leg up which started on Sunday after the company said an arbitration tribunal in London had awarded it the right to receive some outstanding payments from the government of Iraq's Kurdistan region. Egypt's main index rose 1.3 percent as most stocks were up. Growing interest in Egypt among foreign investors and economic reforms being implemented by the government were the main sources of the market's optimism, said Harshjit Oza, assistant director of research at Naeem Holding in Cairo.
Earlier this month, newly elected president Abdel Fattah al-Sisi's government pressed ahead with plans to cut fuel subsidies which have been a burden on the state budget, a move largely welcomed by the market. In a sign that Egypt was becoming a more attractive investment destination, local snack maker Bisco Misr said on Sunday that Abraaj Investment Management, an affiliate of United Arab Emirates' Abraaj Capital, had made an approach to buy at least a 51 percent stake in the company.
Shares in Bisco Misr added 1.5 percent on Monday after jumping their 10 percent daily limit in the previous session. Elsewhere in the region, Saudi Arabia's bourse slipped 0.05 percent, largely because of Saudi Basic Industries (SABIC), which fell 2.2 percent.
Two subsidiaries of SABIC, one of the world's biggest petrochemical companies, reported weak second-quarter earnings on Sunday. Yanbu National Petrochemical Co (Yansab) made a net profit of 613 million riyals ($164 million), while analysts polled by Reuters had forecast an average net profit for the quarter of 671 million riyals.
Saudi Arabian Fertilizer Co (SAFCO) made 639 million riyals ($170 million) in the quarter, against analysts' estimate of 689 million riyals. Analysts surveyed by Reuters expect SABIC's profit to rise 6.3 percent in the second quarter. Kuwait's bourse slipped 0.3 percent on Monday after a four-day rally as trading volume edged down.
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