Dubai and Qatar led market rises in the Gulf on Thursday on the back of property and banking stocks, while Egyptian real estate companies dragged down the market after jumping earlier this week. Dubai's main index rose 1.5 percent as shares in Emaar Properties, the emirate's largest listed developer, jumped 3.8 percent.
This followed an announcement on Wednesday by another large local property firm, unlisted Nakheel, that its net profit surged 54 percent for the first half of this year. The company did not provide quarterly figures, but Reuters calculations showed a net profit of 1.22 billion dirhams ($332 million) in the second quarter compared to 709 million dirhams a year earlier, a 72 percent jump. Nakheel's earnings fuelled optimism about Dubai real estate firms in general - although in Emaar's case, analysts surveyed by Reuters expect the firm's profit growth to slow down to 18 percent in the second quarter from 55 percent in the first.
Meanwhile, shares in cooling firm Tabreed surged 7.9 percent after the company said it was heading a consortium that had acquired a concession to provide district cooling services in Abu Dhabi worth 1.05 billion dirhams. Abu Dhabi's bourse added 0.6 percent on the back of large lenders. First Gulf Bank, which helped finance the Tabreed deal, rose 1.8 percent and National Bank of Abu Dhabi added 1.7 percent.
Both United Arab Emirates markets rebounded earlier this month after sharp drops in June, but now appear to be consolidating as investors await second-quarter reports, due in late July and early August. "We were expecting the volatility to decrease and that's exactly what happened," said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi. "The market should trade sideways in the next few weeks. It should be more quiet."
Qatar's bourse rose 1.6 percent on the back of Islamic lenders. Masraf Al Rayan jumped 4.4 percent and Qatar Islamic Bank added 4.0 percent. Together with the UAE, Qatar became part of MSCI's emerging markets index at the end of May, posting strong gains ahead of the upgrade and dropping sharply in the subsequent correction. "The sell-off in Qatar began on fundamental grounds but was extended by panic and overshot on the downside," said Akber Khan, director of asset management at Al Rayan Investment in Doha. "It made sense for there to be a bounce and now it's a matter of reaching a new equilibrium."
The Cairo bourse pulled back 0.5 percent after gaining 2.2 percent In the previous two sessions as investors scooped up real estate stocks. The rally was based on expectations of increased demand for property as a hedge against inflation after Egypt's government decided to cut fuel subsidies in order to reduce budget deficit. On Thursday, property stocks retreated. Talaat Moustafa Group, the largest listed developer, slid 1.7 percent, Palm Hills Developments was down 2.4 percent and SODI dropped 3.0 percent.
In Saudi Arabia, Saudi British Bank rose 0.8 percent after posting a 15.2 percent increase in second-quarter profit, while the bourse index edged up 0.2 percent. The bank said it earned 1.16 billion riyals ($309 million) in the three months to June 30, compared with 1.00 billion riyals in the same period a year earlier. Analysts surveyed by Reuters had expected the bank to post an average net profit of 1.09 billion riyals for the quarter.
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