Most stock markets in the Middle East continued rebounding on Thursday on the back of generally positive third-quarter corporate earnings and resilient European equities. Bourses in the region continued to imitate global markets, falling in line with US and Asian indexes in the morning but then recovering after European stocks and oil prices steadied.
Dubai's index rose 0.6 percent on the back of lenders Emirates NBD (ENBD) and Dubai Islamic Bank (DIB), both of which reported strong profit growth and beat analysts' estimates on Wednesday. The index closed at 4,573 points, still below important technical resistance on the 200-day average of 4,587. On the positive side, retail investors were net buyers for the first time this week, according to bourse data.
Abu Dhabi's index also added 0.6 percent as National Bank of Abu Dhabi rose 2.1 percent and Abu Dhabi Commercial Bank, whose quarterly profit matched estimates on Wednesday, climbed 1.6 percent. Shares in energy firm Dana Gas jumped 3.3 percent after it said it had collected $47 million against its receivables in Egypt and received a cash advance of $18 million against future deliveries from its project in the Kurdistan Region of Iraq.
Qatar's index rose 1.0 percent in a broad rally. Heavyweights Industries Qatar and Qatar National Bank added 2.3 and 1.4 percent respectively. Saudi Arabia's benchmark underperformed the region and edged down 0.4 percent. Petrochemicals giant Saudi Basic Industries (SABIC) was the main drag, sliding 0.6 percent.
SABIC and Royal Dutch Shell said on Thursday they had shelved plans to expand an existing petrochemical joint venture in Saudi Arabia as the results of feasibility studies were not encouraging. Shares in Al Tayyar Travel Group fell 1.7 percent after it posted a 13.5 percent rise in third-quarter net profit rise, slightly below analysts' forecasts. Kuwait's main index added 0.5 percent and shares in Kuwait Finance House (KFH), the country's biggest Islamic lender, jumped 5.1 percent. KFH reported a 10 percent fall in third-quarter net profit on Thursday, but it was in line with analysts' forecasts.
Separately, the Kuwait Investment Authority (KIA) said late on Wednesday that it would resume a programme of selling off its stakes in local listed companies, including KFH, telecommunications operator Zain and Kuwait Investment Co. The KIA said it would start by offering to the public its 76.2 percent stake in Kuwait Investment during the first half of 2015. Shares in Kuwait Investment surged 7.6 percent after opening as investors bet new ownership could improve its management, attract fresh interest in the firm and boost trading liquidity in the stock. Zain rose 1.6 percent.
However, the stock exchange then cancelled all the day's trades in the two stocks and suspended both of them until Sunday, pending further details of the KIA's plans. Trading in KFH shares had already been suspended pending its earnings announcement, but resumed later in the session.
Kuwait is the only market in the region with negative year-to-date performance - it is down 1.8 percent. At the same time, according to local firm KIPCO Asset Management, Kuwait's companies have so far reported a 35 percent increase in total third-quarter earnings. Elsewhere in the region, only Dubai's listed firms have had a higher earnings growth rate of 47 percent. Kuwaiti banks and companies have announced a string of debt settlement deals this year, which may have helped businesses refocus on growth and reduced banks' non-performing loan ratios.
Commercial Bank of Kuwait (CBK), the Gulf state's fifth-largest lender by assets, said this week it had reduced its non-performing loans to 1.3 percent of its total loan book from a 2009 level of 25 percent. Fouad Darwish, head of brokerage services at Kuwait's Global Investment House, said he believed the market would catch up and generate positive returns before the end of this year. "I'm bullish because we;re at a such a low point, we can't go any lower," he said. "It's not justifiable."
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