Abu Dhabi, Oman Shares Advance; Saudi Arabia’s Index Declines

www.bloomberg.net

By Zainab Fattah

Feb. 24 (Bloomberg) — Shares in Abu Dhabi, Oman and Qatar advanced, led by real-estate developers and banks, on investor perceptions prices now are low compared with those in other emerging markets and that regional growth will benefit from higher oil prices.

Saudi Arabia’s measure declined for the first time in nine days, led by Saudi Basic Industries Corp. and Al-Rajhi Bank.

Dana Gas PJSC, a United Arab Emirates-based gas producer and distributor, closed at the highest price in almost a month after announcing plans for petrochemical ventures. Bank Muscat SAOG gained the most in more than 2 1/2 years after an acquisition in India. United Development Co. closed at the highest in almost two years.

“Valuations have come down to more acceptable levels since the recent correction, and Gulf markets are more attractive than other emerging markets because the economic fundamentals are much stronger here,” said Kamran Butt, Dubai-based head of Middle East equity research at Credit Suisse Group. “The high oil prices are also bringing back investors as oil continues to fuel regional economic growth.”

The Abu Dhabi Securities Market Index advanced 0.5 percent to 4,820.14, gaining for a fourth day. Oman’s Muscat Securities Market 30 Index rose 2.8 percent, increasing for a fifth day. Qatar’s Doha Securities Market Index added 0.3 percent.

Members of Abu Dhabi’s index trade at an average of 17 times forward-looking earnings, according to data compiled by Bloomberg. That compares with a multiple of 27 for China’s CSI 300 Index and 20 for India’s Sensitive Index.

Growth Rates, Oil Price

The U.A.E.’s economy will grow 7.2 percent this year and Oman’s 5.5 percent, according to the median estimates of seven economists polled by Bloomberg in December. That compares with economic growth of 4.5 percent in Brazil this year, according to a Bloomberg survey.

Crude oil for April delivery rose 0.6 percent to settle at $98.81 a barrel on the New York Mercantile Exchange on Feb. 22. The April contract rose 3.5 percent this past week. Prices are up 62 percent from a year ago. Oil and gas revenue made up 37 percent of the U.A.E.’s gross domestic product in 2006, and contributed 62 percent to Qatar’s GDP, Bloomberg data show.

Dana Gas climbed 2.6 percent to 2.41 dirhams, its highest close since Jan. 16. The U.A.E.-based company will work with Kuwait’s Ikarus Petroleum Industries on gas and petrochemical ventures in the Middle East and North Africa.

Bank Muscat

Bank Muscat, Oman’s biggest bank, was up 7.9 percent to 2.21 riyals, its biggest one-day advance since June 20, 2005. HDFC Bank Ltd., India’s third-biggest by market value, agreed to buy Centurion Bank of Punjab Ltd. in the nation’s biggest banking takeover to gain services and branches before foreign lenders are permitted to buy local ones. Bank Muscat owns 14 percent of Centurion, according to Bloomberg data.

“The shares are surging on the merger news,” Wael Abdulrasol, international trading manager at United Securities LLC, said in a phone interview from Muscat, Oman.

United Development leapt 8.6 percent to 46.9 riyals, its highest close since May 2006. The Qatari property developer building the Pearl-Qatar man-made island off the emirate’s Doha coast raised its foreign shareholding limit to 49 percent from 25 percent.

First Finance Co. climbed 5.4 percent to 491 riyals, its highest close since Jan. 15. The Shariah-compliant bank based in Qatar plans to raise its foreign ownership limit to 49 percent from the 25 percent currently allowed, the company said in a statement posted on the Web site of the Qatari bourse today.

Tadawul Declines

General Trading & Food Processing Co. rose 3.6 percent to 0.435 dinars. The Bahraini food trader said full-year net income increased 75 percent to 2.1 million Bahraini dinars ($5.6 million).

Saudi Arabia’s Tadawul All Share Index dropped 2.1 percent, its first decline in nine days. The index surged 17 percent during the eight-day rally and has gained 21 percent this year.

“Investors are taking profit, which is healthy considering shares have risen massively in the past two weeks,” Mohammed Obaid, senior trader at Samba Financial Group said in a phone interview from Riyadh.

Saudi Basic, the world’s biggest chemicals maker by market value known as Sabic, fell 3.3 percent to 177 riyals. Still, the shares have jumped 22 percent since Feb. 11. Al-Rajhi Bank, the biggest bank in Saudi Arabia by market value, decreased 2.9 percent to 110.75 riyals.

The Dubai Financial Market General Index declined 0.2 percent, ending three days of gains. The Bahrain All Share Index lost less than 0.1 percent. Kuwait’s stock market was closed today for the National Day holiday. The market will reopen Feb. 27.

To contact the reporter on this story: Zainab Fattah in Dubai on [email protected]

Last Updated: February 24, 2008 11:05 EST

 

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