Most Gulf stock markets lost steam on Monday as oil prices pulled back although strong fourth-quarter earnings at two major banks boosted Abu Dhabi, while Egypt resumed falling because of currency jitters. Bourses in the Gulf had surged over the past few days as an oil price rebound encouraged investors to return to buy beaten-down stocks. This buying quickly diminished on Monday as Brent crude slipped 2 percent to below $35.50 a barrel.
The Saudi Arabian index edged down 0.2 percent as petrochemical stock retreated, with Saudi Basic Industries down 1.8 percent. Construction company Jabal Omar Development Co dropped 2.5 percent, after slipping 1.6 percent on Sunday when it said it was in talks with creditors after failing to make the first repayment of 650 million riyals ($173 million) on a 3 billion riyal loan from the government. Saudi builders are among the companies hardest hit by cuts in government spending due to low oil prices, as well as by rising labour costs.
Abu Dhabi's index climbed 1.3 percent as First Gulf Bank jumped 3.1 percent. Late on Sunday it reported an 11 percent quarterly profit rise to 1.72 billion dirhams ($468.4 million), well above analysts' average forecast of 1.46 billion dirhams. The stock had soared 12.4 percent on Sunday in anticipation of the earnings. Abu Dhabi Commercial Bank surged 4.8 percent after posting a profit of 1.19 billion dirhams, at the top end of forecasts of 986 million and 1.12 billion dirhams.
The two banks' strength appeared to ignite buying in National Bank of Abu Dhabi, which fell in early trade but ended 3.9 percent higher; last week it posted 24.5 percent drop in profit. Most actively traded Abu Dhabi stocks barely moved, however. Dubai's stock index, which had jumped 4.9 percent on Sunday, pulled back 0.6 percent on Monday. Emaar Properties slid 1.4 percent. National Central Cooling Co (Tabreed) gained 4.6 percent after it reported a 6 percent rise in 2015 net profit.
Qatar's index edged up 0.7 percent as the most heavily traded stock, Vodafone Qatar, gained 1.5 percent. In Bahrain, Al Baraka Islamic Bank tumbled 7.1 percent in its heaviest trade since last May. Chief executive Adnan Ahmed Yousif said on Sunday that the bank planned to open a Shariah-compliant lender in France next year and to acquire a bank in Indonesia either this year or in 2017.
Egypt's index dropped 1.4 percent with major real estate developer Palm Hills Development down by the same amount. Bank of America Merrill Lynch said in a report that if bilateral and multilateral aid pledges materialised on time, Egypt could avoid a sharp currency devaluation this year.
But it added: "We think the authorities' plan remains the same: muddle through due to import restrictions and external aid, hoping that foreign direct investment can pick up self-sustainably. "However, the pledges obtained are not sufficient to boost FX reserves into a safer zone, and thus we continue to see pressure on the Egyptian pound playing out."
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