Enjoy our faster App experience

Etisalat lifts Abu Dhabi stocks 2.9%

Etisalat said local and foreign institutions and expatriate individuals would be allowed to buy up to 20 per cent of its shares, though it did not say when the change would take effect.



By (Reuters)

Published: Wed 24 Jun 2015, 11:32 PM

Last updated: Wed 8 Jul 2015, 2:47 PM

Dubai — A leap by the shares of UAE telecommunications operator etisalat boosted Abu Dhabi’s stock market sharply on Tuesday, while Saudi Arabia stabilised after six straight trading days of declines.

Etisalat said local and foreign institutions and expatriate individuals would be allowed to buy up to 20 per cent of its shares, though it did not say when the change would take effect. Currently, only UAE individual investors can buy from the market.

This sent the stock rocketing its 15 per cent daily limit to Dh13.80, its highest level since July 2008. The rise left the stock with a forward price/earnings ratio of about 12.5 times, more expensive than Saudi Telecom at around 11 but still cheaper than Qatar’s Ooredoo at nearly 16.

Etisalat pulled Abu Dhabi’s stock index up 2.9 per cent to 4,756 points; it broke above its March and April peaks and also exceeded its 200-day average for the first time since last November, which was technically very bullish.

Shares in rival UAE operator du, listed in Dubai, climbed 4.6 per cent in sympathy. But after a strong rise in early trade, the Dubai market pulled back with its main index closing up just 0.2 per cent.

Dubai was influenced by another wild swing in the shares of Amlak Finance, which surged as much as 12.8 per cent in early trade to a new multi-year high. But Amlak, again Dubai’s most heavily traded stock, gave up its gains in late trade and closed 3.1 per cent lower at Dh2.50. Many institutional investors believe retail investors may have pushed the stock up too fast; some analysts see fair value for the stock below Dh1.

Saudi Arabia’s stock index edged up 0.1 per cent to 9,280 points, stabilising after falling for the past six trading days on disappointment at the slow pace of foreign fund inflows into the market. Reuters

Qatar’s index edged down 0.3 per cent as Ezdan Holding, which was the most heavily traded stock and had risen sharply in the past two days after its foreign ownership ceiling was raised, fell back 1.7 per cent.

In Oman, Al Madina Insurance rose 2.3 per cent in thin trade after saying it plans to acquire domestic rival Vision Insurance. Financial details were not given.

Saudi Arabia, EgyptSaudi Arabia’s stock index edged up 0.1 per cent to 9,280 points, stabilising after falling for the past six trading days on disappointment at the slow pace of foreign fund inflows into the market. It had dropped on Sunday below its 200-day average, now at 9,414 points, a bearish technical signal. The average now acts as immediate resistance.

The market opened to direct foreign investment on June 15 but inflows since then have been minimal, and the latest exchange data showed there was no change to this pattern on Monday. However, blue chips that bore the brunt of the disappointment attracted bargain-hunting on Tuesday. Petrochemical giant Saudi Basic Industries climbed 0.5 percent and property developer Dar Al Arkan added 1.7 percent.

Egypt’s bourse remained soft. The index slid 0.5 per cent, with real estate firm Talaat Mostafa remaining one of the main targets of selling; it fell 2.3 per cent.

The market’s failure to stage a sustained rise after the government suspended a capital gains tax in mid-May has disappointed investors. — Reuters

 


More news from Markets