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Gulf Shares Gain as Investors Seek Shelter From U.S. Slowdown
By Zainab Fattah
Jan. 13 (Bloomberg) -- Persian Gulf shares advanced as investors sought assets in the expanding region amid fears of a recession in the U.S.
Amlak Finance PJSC, the United Arab Emirates' biggest mortgage-finance provider by market value, gained after it reported a more than eight-fold surge in fourth-quarter profit. Sharjah Islamic Bank jumped the most in more than three years. The bank's board will meet later this week to discuss a capital increase.
``Foreign investors will continue to come for the diversification effect,'' said Hashem Montasser, the Dubai, U.A.E.-based head of asset management at EFG-Hermes, Egypt's largest investment bank. ``We have different economic factors and a different investor base, the bulk of which is local. There is no reason for us to follow the U.S.''
The Dubai Financial Market General Index rose 0.5 percent to 6109.69, while the Abu Dhabi Securities Market Index increased 2 percent to 4,807.52. The measures have surged 44 and 35 percent respectively since Sept. 30. The Kuwait Stock Exchange Index added 0.9 percent today, bringing the six-day advance to 5.1 percent.
Economic Growth
Gulf states, which together pump a fifth of the world's oil, are earning more than $1.3 billion a day with crude above $90 a barrel. Gulf Cooperation Council states, which include the U.A.E. and Kuwait, will expand at a faster rate in 2008 than last year, EFG-Hermes Holding SAE said in a report Jan. 7. U.S. stocks had their worst start to a year since 1982 on speculation that the six-year economic expansion is ending. The six GCC countries are the U.A.E., Saudi Arabia, Kuwait, Qatar, Oman and Bahrain.
Foreign investors bought shares and bonds worth 4.4 billion dirhams ($1.20 billion) on the Dubai Financial Market last week, the exchange said in an e-mailed statement yesterday. That extended a buying trend of late December and compares with purchases of 3.7 billion dirhams during the last week of November, before the holiday period.
Crude oil for February delivery fell $1.02, or 1.1 percent, to settle at $92.69 a barrel on the New York Mercantile Exchange Jan. 11. Crude traded in New York averaged $72.36 per barrel in 2007, 20 percent higher than the previous year. Oil and gas revenue contributed 37 percent to the U.A.E.'s gross domestic product in 2006, 55 percent to Kuwait's GDP and 62 percent to Qatar's.
Profit
Amlak rose 1.6 percent to 5.6 dirhams, bringing this month's gain to 9.2 percent. The company said yesterday fourth-quarter net income surged to 128.4 million dirhams ($35 million) on real- estate financing and investments.
Sharjah Islamic Bank climbed 9.3 percent to 4.49 dirhams. The bank's board will meet Jan. 15 to consider a capital increase, according to a statement posted on the Web site of Abu Dhabi's bourse. The board will also discuss 2007 earnings and dividend.
In Kuwait, Zain, the company with the second-biggest weighting in the country's index, gained 2.5 percent to 4,080 fils.
Al Madina for Finance & Investments climbed 4.4 percent to 710 fils. Al Madina's unit, Sarh al Madina Real Estate, bought a 514,000 square meter island in Ras al-Khaima in the U.A.E. for 180 million dirhams, according to a filing to the Kuwaiti bourse today. Al Madina owns 49.7 percent of Sarh al Madina.
Tadawul Falls
Saudi Arabia's benchmark was the only one in the Persian Gulf tracked by Bloomberg to decline today.
Saudi Arabia's Tadawul All Share Index lost 1.3 percent to 11,746.69. The measure is still up 5.1 percent for the year.
Saudi Basic Industries Corp. lost 1.8 percent to 214 riyals. The world's biggest chemicals maker by market value may join state-owned Saudi Aramco in upgrading Yanbu oil refinery and add a petrochemicals plant, Middle East Economic Digest reported, citing unidentified industry officials.
In Qatar, the Doha Securities Market Index advanced 1.6 percent, while Oman's Muscat Securities Market 30 Index increased 0.3 percent. The Bahrain All Share Index added less than 0.1 percent.
In North Africa, Egypt's CASE 30 Index rose to a high as Gulf investors, flush with petrodollars from record oil prices, bought shares.
The CASE 30 Index added 0.5 percent to 10,887.15, bringing this year's gain to 3.3 percent. Telecom Egypt, the largest fixed-line telephone company in the Middle East, and Credit Agricole Egypt led the advance.
``High oil prices are trickling down into other Middle Eastern markets outside of the Gulf,'' said Aly Allouba, head of equities at Delta Securities Egypt in Cairo.
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