Middle East markets: Saudi turnover at 5-year high; property drags Egypt lower

19 Mar, 2012

Turnover on Saudi Arabia's bourse hit a five-year peak on Sunday as money poured in with stocks hitting a new three-and-a-half year high, while real estate stocks weighed on Egypt's bourse after results disappointed. The benchmark of the Saudi bourse, the largest market in the Arab world, climbed 0.2 percent to its highest close since September 14, 2008.
Shares worth 18 billion riyals ($4.8 billion) changed hands, the highest daily value since April 2007. "Most of the turnover is because of speculative behaviour that we haven't seen in years," said Tarek al-Madi, a Saudi-based independent analyst.
Fresh funds are rushing in from other asset classes such as real estate, analysts said.
Trading focused on small-caps. Dar Al Arkan surged 7 percent, Zain Saudi gained 9.9 percent and Alinma Bank climbed 3.9 percent. These three stocks together accounted for about half of all shares traded.
Investors were targeting stocks trading near their par-value of 10 riyals, Madi added.
In Egypt, the main index lost 2 percent, with real estate stocks leading the decline after investors were disappointed by results of Egyptian Resorts even though it narrowed its 2011 loss.
"The Egypt Resort results were worse than expected, because investors were looking for an improvement after it posted better third-quarter results with fewer losses," a trader said.
Egyptian Resorts dropped 3.5 percent, Talaat Moustafa declined 5 percent, Palm Hills fell 4 percent and Amer Group lost 2.6 percent.
"Investors are exiting the market because there are no positive triggers or news," said Sarah Tolba of Pharos Securities. "The market will see a further correction."
United Arab Emirates stocks fell on profit-taking. Aldar Properties dropped 5 percent and Sorouh Real Estate fell 6.5 percent, trimming year-to-date gains to 42.4 and 51.2 percent respectively. These stocks rallied in recent weeks amid merger talks. Abu Dhabi's index ended 0.7 percent lower, down for a second session after five straight gains.
"It's highly expected profit-taking that should have happened sooner," said Firass Yaish, business development manager at ICM Capital.
"Aldar and Sorouh have lived the news of the merger to the fullest and the stocks now have to go back to their real value," he added. Dubai's benchmark finished 1.4 percent lower, cutting year-to-date gains to 22.7 percent.
In Kuwait, the bourse ended at an eight-month high, as investors continued to pick up small-caps.
The index gained 0.5 percent to its highest close since June 27. It extends year-to-date gains to 7.2 percent, underperforming some other Gulf bourses.
"Kuwait's move (year-to-date) compared to the rest of GCC (Gulf states) is nothing," said a Kuwait-based trader who asked not to be identified, adding this was drawing in foreign investors eyeing a potential catch-up move by the index. "And local investors are back into small-caps."
In Qatar, the index ended 0.1 percent higher at 8,671 points, up for a second session in five.

Read Comments