DUBAI / Reuters
Strong corporate earnings in Egypt and Dubai buoyed those markets on Tuesday, while Kuwait continued pulling back on profit-taking after a bullish run last month.
Cairoâ€™s Palm Hills Development soared 9.2 percent to 3.08 Egyptian pounds after it reported fourth-quarter consolidated net profit after minority interests of 235 million pounds ($12.7 million) versus 169 million pounds a year ago, beating many analysts’ estimates. Revenue rose to 2.00 billion pounds, up 89 percent.
Analysts at Cairo’s Naeem Brokerage said the company’s top line results were ahead of their estimates while rising real estate prices and accelerated construction in recent years would boost the bottom line in coming quarters.
Other shares in Egypt’s blue chip index were also robust with two food producers, Arabian Food Industries and Juhayna Food Industries, jumping by their 10 percent daily limits. The index rebounded 2.2 percent.
A trader at Cairo-based Beltone Securities, Wafik Dawood, said funds were still looking for the best times to build long-term positions. The index has jumped nearly 50 percent since the Egyptian pound was floated on Nov. 3, although turnover has been shrinking in the last two weeks.
Dubai Financial Market climbed 3.0 percent after it made a net profit of 78.5 million dirhams ($21.4 million) in the fourth quarter, five times what it made in the prior-year period. Quarterly revenue increased to 131.2 million dirhams from 69.3 million dirhams as the market’s trading turnover ballooned late last year, buoyed by a recovery of oil prices.
The Dubai index rose for a third consecutive session and added 0.7 percent, although it briefly traded in negative territory early in the day.
Amusement park operator DXB Entertainments, which has not yet reported quarterly earnings, rose 1.8 percent. The operator of Dubai’s Legoland, Motiongate and Bollywood Parks will report results for the first time since those facilities opened.
Banking shares helped lift Abu Dhabi’s index 0.5 percent. Union National Bank, which is expected to release earnings on Thursday, jumped 3.5 percent.
KUWAIT, SAUDI UNDERPERFORM
Kuwait’s index, which soared 19 percent in January, dropped 1.8 percent on profit-taking in heavy trading volume. It is now down 5.2 percent since Jan. 30.
Many fund managers believe valuations no longer support sharp rises from current levels. The blue chip Boursa Kuwait 15 index is trading at about 15 times trailing earnings, at the high end of the region’s range, according to Reuters data.
In Saudi Arabia, the index dipped 0.3 percent with decliners outnumbering gainers 93 to 61. Middle East Healthcare declined 1.4 percent after saying a subsidiary would start commercial operations at a new hospital in the city of Hail next week. It predicted the hospital would incur an operating loss of 7.5 million riyals ($2 million) for 2017.