Ex-dividend banks weigh on Abu Dhabi; Egypt outperform

DUBAI / Reuters

Most major Gulf stock markets were pulled down on Thursday by a 5 percent overnight slide in oil prices, while Abu Dhabi was hit particularly hard as heavyweights First Gulf Bank and National Bank of Abu Dhabi traded ex-dividend.
Abu Dhabi’s stock index dropped 2.9 percent as First Gulf Bank tumbled 8.7 percent and National Bank of Abu Dhabi lost 4.2 percent.
Analysts said stocks in both banks, which are due to merge on April 1, fell more steeply than justified by the simple removal of the value of the dividends, suggesting some investors believed the value of the combined entity looked too demanding.
Talal Samhouri, head of asset management at Doha-based Amwal, said some institutions had held onto the stocks to collect the dividends but saw little advantage in continuing to hold them at a relatively high price-to-book ratio of above one.
Dubai’s index fell 0.3 percent in very thin trade with tourism-sensitive companies closing lower; theme parks operator DXB Entertainments dropped 4.7 percent and Emaar Malls Group fell 0.8 percent.
Saudi Arabia’s index fell 0.8 percent as all but one of the 14 petrochemical shares declined in response to oil. PetroRabigh was the chief loser, slumping 4.2 percent.
Real estate investment trust Riyad REIT rose 1.8 percent after the fund signed three memorandums of understanding for the possible acquisition of buildings in three projects. The fund estimated the value of the acquisitions would be around 1.2 billion riyals ($320 million) and said it would finance those investments through a loan or an increase in share capital.
Property developer Jabal Omar climbed 3.0 percent after the government said it planned to expand the developer’s projects in Mecca to 1.66 million square metres from 1.17 million square metres.

QATAR, EGYPT OUTPERFORM
In Doha, the index, which traded flat for most of the session, gained buying momentum in the final hour of trade, helping it rebound 1.0 percent from a 10-week low.
Doha Bank, which had weighed on the market in recent days after going ex-dividend and obtaining approval for a new share issue, rose 2.5 percent. Most other banks also firmed with Masraf Al Rayan adding 1.2 percent.
Egypt’s index rose 0.9 percent, its seventh straight session of gains. Foreign investors were net buyers, according to bourse data.
The Egyptian pound, which was floated on Nov. 3, has been falling back against the U.S. dollar in recent days, making stocks relatively cheap for foreign funds.
“Some investors will come in and buy Egyptian shares, and once the currency strengthens against the dollar they will cash out with the hope they captured the upside from both a stock price increase and a favourable currency conversion,” said an Egypt-based trader.
But number of declining stocks in the 30-share index exceeded rising ones by 16 to 10.
Export-related shares were some of the top gainers, with Ezz Steel advancing 4.2 percent and Arabia Cotton Ginning jumping 4.4 percent. Orascom Telecom, the most heavily traded stock, lost 2.9 percent.