Cues from Europe and US pull Mideast stocks down

Most stock markets in the Middle East fell on Tuesday as European stocks, which had led them up in the previous session, changed direction and US equities continued to decline.

By Olzhas Auyezov (Reuters)

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Published: Wed 15 Oct 2014, 11:27 PM

Last updated: Tue 7 Apr 2015, 10:42 PM

Dubai’s bourse fell 2.9 per cent to a one-month closing low of 4,572 points as all liquid stocks closed in the red. Heavyweight developer Emaar Properties dropped 3.7 per cent and Dubai Islamic Bank fell 2.7 per cent.

Abu Dhabi’s index fell 1.1 per cent, although some stocks gained, including Union National Bank which rose 0.2 per cent after brokerage EFG Hermes said on Monday it might secure a place in MSCI’s emerging market index next month.

“I think what’s happening in the US and international markets is pressuring the markets here in the region,” said Ali Adou, portfolio manager at The National Investor in Abu Dhabi.

The pan-European FTSEurofirst 300 Index rose in the first half of Monday’s session, helping markets in the UAE, Qatar and Saudi Arabia rebound. But it closed in the red on that day as worries about a weak global economy resurfaced, and the US benchmark S&P 500 fell 1.7 per cent on Monday to a five-month low. European stocks then fell further on Tuesday.

Qatar’s bourse, however, was more resilient and edged up 0.2 per cent largely thanks to Qatar National Bank, or QNB, which rose 2.2 pe rcent after reporting a 20.8 per cent jump in third-quarter net profit earlier this week.

QNB, whose results are generally viewed as a gauge for the health of the wider banking sector in Qatar, made a net profit of QR2.9 billion ($796.4 million) while the average forecast from six analysts polled by Reuters had been QR2.57 billion.

Saudi Arabia, Egypt

Saudi Arabia’s main index fell 1.9 per cent as most stocks, including blue chips, declined. However, some stocks, such as Saudi Cement, Yanbu Cement, Southern Province Cement and Eastern Cement, edged up.

Cement production involves heating minerals to very high temperatures and the drop in oil prices could reduce energy costs for companies in the sector.

Egypt’s bourse also remained in a profit-taking mood as virtually all stocks declined and the main index fell 2.6 per cent.

Ezz Steel was one of the few exceptions, jumping 3.4 per cent after its subsidiary Al Ezz Dekheila Steel Alexandria said late on Monday that natural gas supplies to its plant had resumed.

According to Naeem Brokerage, Al Ezz Dekheila accounts for more than 90 per cent of the parent company’s earnings before tax, interest, depreciation and amortisation.

Elsewhere, Kuwait added 0.3 per cent to 7,581 points, Oman edged down 0.4 per cent to 7,167 points and Bahrain pulled back 0.4 per cent to 1,459 points.

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