Saudi Stocks Touch All-Time High

Al Suwaidi warns of sharp correction


19/Sep/2005
Gulfnews.com
The UAE Central Bank Governor yesterday expressed concerns about asset prices and capital flows into real estate and stock markets and cautioned that a sharp correction was imminent.

Sultan Bin Nasser Al Suwaidi said spiralling rents were a major cause of inflation.

"Asset prices [mainly real estate and stocks] are a concern for me at this point and we should do something about it.

"And investment funds that went into the real estate market are creating excess capacity and if this excess capacity in the real estate markets cannot be absorbed there will be a sharp correction and rents and prices will go down," Al Suwaidi told a gathering of bankers.

"There will also be a correction in the financial markets that were already down but gaining slowly. To help the financial markets, we must create awareness to redirect investment flows into other sectors."

The governor said the UAE had the potential to create companies in other sectors such as food processing and air transport.

He also cited the example of Dubai Healthcare City and Dubai University City. "These two initiatives will absorb real estate capacity."

Inflation in the UAE is being created by the strong euro that is rising steadily against the dollar, and the real estate and rents that went up tremendously in 2004 and 2005, he said.

"In an open economy like the UAE, you should have resources to tackle asset price inflation with a traditional whip. We must create investment opportunities in new areas and reduce asset price inflation," he said when asked what steps the Central Bank was taking to contain inflation.

Bulls lift indices to all-time highs


18/Sep/2005
Khaleej Times
The stock rally on the the UAE bourses, continuing for the second consecutive week lifted the key UAE stock indices to all-time highs yesterday. While the UAE benchmark National Bank of Abu Dhabi Index gained 168 points to close at 18,150 points, the Dubai Financial Market Index jumped 2.8 per cent to close at a new high of 1,194.9 points.

Big gains were reported on banking and real estate counters. Market pivotals including Emaar, Dubai Islamic Bank, Commercial Bank of Dubai and Emirates Bank shares posted big gains in the range of 2 per cent to 7 per cent yesterday. Reflecting the buoyant sentiments the NBAD banking sector subindex gained 252 points (1.5 per cent) while the service sector subindex gained a modest 106 points.

"Investors are anticipating excellent third and fourth quarter results from local banks. Abundant liquidity, surging credit off-take and excellent gains from IPO financing have given heathy bottomlines for most banks during the first half of the current year," said an analyst with a local investment bank.

Across the two bourses, the UAE market traded more than Dh4.7 billion turnover. The Dubai Financial Market traded 212 million shares worth Dh4.4 billion yesterday. While the Emaar counter accounted for close to 50 per cent of the DFM turnover from a volume of 77 million shares, the share gained 2.4 per cent to close at Dh27.85. "Dana Gass 2.06 billion IPO scheduled for September 20 is likely to apply some pressure on the current rally. In addition, the market is highly volatile as most leading stocks spurt in the morning hours and retreat during the closing hours indicating that some of the large investors are unwinding their positions to book profits," said a broker.

In the service sector, with the exception of Emaar, most stocks reported small losses yesterday indicating the overall shallow base for the current rally. While the Amlak scrip slipped 2.3 per cent to close at Dh14.45, Arabtec and Shuaa shares were down by 15 fils and 10 fils respectively.

The banking sector traded a large volume of more than 31 million shares with more than 95 per cent of the turnover coming from the Dubai Islamic Bank counter. The DIB stock is once again in the focus with the counter reporting large turnovers and big gains. Two weeks ago, DIB stock deals had come under investigations from Securities and Commodities Authority following allegations of cross-trading and price manipulation. The scrip gained more than 7 per cent yesterday to close at Dh33.50. "Strong fundamentals and its aggressive expansion plans make DIB a strong investment case. The recent jump in share prices have also have a lot to do with the market rumours that the bank is likely to offer a rights issue in the near future. Although DIBs management had clarified its position, investors continue to believe in an imminent capital expansion," said a banking industry analyst.

While other bank shares including the Commercial Bank of Dubai and Emirates Bank gained Dh3.45 and Dh3.10 respectively, the Abu Dhabi-listed bank scrips were headed south. The NBAD share closed 75 fils down at Dh47.70 while Union National Bank and Abu Dhabi Islamic Bank slipped 10 fils and 60 fils, respectively.

In the service sector, Etisalat share was down by 75 fils (2.5 per cent) at Dh329.05. 
 

KAMCO shares soar 8.9%; KSE closes week with an
all-time high of 10,062 pts

15/Sep/2005
Arab Times
Kuwait Stock Exchange (KSE) closed the week on a high note, after a session alternated with sharp selling pressures and rebound. The stock market closed at 10,062 Wednesday, after crossing 10,000 milestone for the first time the day before. It is now trading 57 per cent higher than it did at the beginning of the year. The KSE grew sharply at the start of the session only to swiftly plunge some 50 points. It hit a bottom at 10,000 and rallied back up. Profit taking intensified at the end of trading before a last minute surge brought the day on day gain to 39.2 points.