Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate. The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.
"The market is starting to rebuild confidence in earnings as a driver for sentiment," said Arqaam Capital in a research note. "Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall," Arqaam said.
"But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co's, Aldar) out of market consolidation." Emaar Properties, Dubai's largest listed developer, reported a 27 percent rise in fourth-quarter profit. The stock rose 2 percent on Sunday.
DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits. In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018.
In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options. The Saudi index closed 0.4 percent down, in contrast to the rest of the region's markets.
Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier. The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank and Al Rajhi Banking & Investment Corp lost 0.3 percent and 0.6 percent, respectively.
In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.
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