Dubai’s bourse rose further on Tuesday after a choppy session as it tried to break free of the 4,000-point psychological resistance level, while other regional markets were narrowly mixed because of a lack of fresh catalysts.
The Dubai index climbed 1.0 percent to a fresh five-year closing high of 4,065 points after rebounding from an intra-day loss of roughly 1 percent – a sign that buyers remain ready to step in on any weakness in the market.
“Expectations for the earnings we haven’t seen yet are high and given the state of emerging markets, there is some interest in dollar-pegged markets like the UAE (United Arab Emirates) from countries where currencies are under pressure,” said Amer Khan, head of asset management at Shuaa Asset Management.
Mid-cap shares led gains with Dubai-based contractor Drake and Scull rising 3.5 percent after the company said a unit won a 375 million dirham ($102 million) contract from local developer Nakheel. This followed a string of recent contract wins.
Abu Dhabi’s measure slipped 0.5 percent, however, easing off a 66-month high.
In Kuwait, the measure advanced 0.2 percent to extend its 2014 gains to 4.1 percent. Sentiment was moderately positive after the government approved $12 billion worth of bids for major upgrades at two oil refineries as part of the country’s delayed mega-development plan.
Last year the market was dampened by renewed disappointment at the pace of projects and investments; many delays were due to political tensions between the cabinet and parliament, and to bureaucratic inertia. So any progress in big infrastructure projects is seen as encouraging.
Saudi Arabia’s benchmark slipped 0.2 percent, easing off Monday’s five-year high. The market is up 3.8 percent year-to-date, underperforming Gulf peers as investors find fewer attractive buying opportunities and many wait for clarity on the extend of damage to companies from tight labour supplies due to a crackdown on illegal foreign workers.
Banking shares weighed with Al Rajhi down 1.4 percent and the sector index retreating 0.8 percent.
“There is uncertainty on the impact from the labour shortage – we would like to see things bottom out from an earnings perspective,” said Shuaa’s Khan.
Egypt’s benchmark index ticked up 0.1 percent as real estate-related shares rose. Most of the market’s recent gains have been due to anticipation of progress towards a democratically elected government with presidential and parliamentary elections due.
“All good news is priced in – now investors will wait to see more positive news coming from the political arena plus the implementation of the new economic policy, and if companies are able to benefit from that,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.
Egypt’s interim government unveiled on Monday its second stimulus package, which will inject 33.9 billion Egyptian pounds ($4.87 billion) into the economy.-Reuters
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