Kuwait's index slumped to a two-month low on Wednesday on market talk that a Zain shareholder had filed a court case against the company over a slated $12 billion stake sale to Abu Dhabi's Etisalat. Zain shares fell 1.4 percent to 1.400 dinars. After market hours, Zain board member Sheikh Khalifa Ali al-Khalifa al-Sabah told Reuters that Al Fawares Holding, which he said owns about 4.5 percent in Zain, had filed a court case against opening the firm's books to Etisalat.
"We do not know what the decision of the judge would be, but expect this would at least postpone the deal," said Naser al-Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait. Major Zain shareholder Kharafi group is the main player in a plan to sell a controlling Zain stake to Etisalat. This is priced at 1.700 dinars per share, but will not be done on a pro rata basis, leading to protests from other big shareholders.
Zain's shares are up 11 percent since the deal was agreed in late September. A Zain spokesman told Reuters: "Zain management does not comment on the actions of shareholders or board of directors." Saudi Basic Industries Corp climbed 1.2 percent, as oil price gains boosted Saudi petrochemical stocks, but banks were mixed.
Oil was up 1.5 percent at $85.32 a barrel at 1231 GMT as rising Chinese factory output and a report saying US inventories fell countered concern about Europe's debts. Samba Financial Group fell 2.2 percent, while SABB dropped 1 percent after Goldman Sachs cuts its price target on the lender. The banking index slipped 0.2 percent, taking its losses to 7.1 percent since September 25.
Dubai's index made its largest gain in three weeks, but traders said this was down to upbeat global markets, rather than Dubai Holding's main unit extending a $555 million loan due November 30 to December 30, the third extension of the facility. The delay is to a arrange a new long-term facility, the conglomerate said. Emaar rose 1.4 percent and Aramex added 1.5 percent, but DP World slipped 0.2 percent. Adel Nasr, United Securities brokerage manager, said Oman investors were chasing high dividend yield stocks such Nawras, up 1 percent, and Oman International Bank, up 3 percent.
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