DUBAI: Saudi Arabia and Abu Dhabi bourses bucked a downbeat Gulf trend as earnings and dividend disclosures lured buyers, while other markets tracked a sell-off across global equities.
Saudi banking shares rallied, moving the sector’s index up 2.6 percent after Riyad Bank proposed to double its capital to SR30bn ($8bn) through bonus shares issued. Shares in Riyad Bank surged 9.2 percent to their highest since June 2008.
“Overall you have certain good stories in the banking sector but if there’s a move in U.S. markets beyond the expected tapering story - you’ll see a reflection of the same happening in Saudi Arabia,” said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC.
Saudi Arabia’s index climbed 0.7 percent, recovering almost all of the week’s losses; just short of last week’s five-year high.
Abu Dhabi’s heavyweight First Gulf Bank jumped 3.1 percent to 20 dirhams per share after the lender increased its 2013 dividend payout by 20 percent and posted record quarterly results that beat estimates. The bank also recommended to the board a 30 percent bonus share payout for 2013.
FGB closed below the all-time intraday high of Dh20.55. It was the main support on the emirate’s index, which climbed 0.3 percent to a new five-year high. A negative global backdrop triggered profit-taking on Dubai’s benchmark, which shed 0.6 percent but rose 11.9 percent in January.
“Things were bad before and now they’re worse - with the global environment seeming shaky, local investors are wary of putting more money in markets that have had among the best worldwide performance year-to-date,” said Sebastien Henin, portfolio manager at The National Investor.
Selling is mostly driven by retail investors, despite there being little local vulnerability to emerging market jitters since Gulf fiscal surpluses are independently strong.
Reuters
