Gulf stocks mostly firm, NBAD continues climb

Most Gulf stock markets were firm in early trade on Monday while National Bank of Abu Dhabi (NBAD) continued to climb in response to its merger talks with First Gulf Bank (FGB).

Shares in NBAD climbed 7.6 percent after surging their 15 percent daily limit on Sunday, while FGB was down 2.7 percent after an 11.5 percent jump in the prior session. Many investors are assuming that any share swap in a merger would favour NBAD holders.

Other Abu Dhabi banks also rose sharply on Sunday on speculation about more potential mergers in the over-crowded banking sector, but that speculation eased on Monday. Abu Dhabi Islamic Bank fell back 3.9 percent after gaining 4.6 percent on Sunday.

The Abu Dhabi index dropped back 0.4 percent after jumping 4.7 percent on the previous day.

In Dubai, the index added 0.4 percent with gainers outnumbering losers 18 to three. Builder Arabtec was up 1.5 percent and Emaar Properties added 0.8 percent.

Heavyweight banking shares advanced in Doha, helping pull the index up 0.1 percent. The largest lender by assets in the Gulf, Qatar National Bank, rose 0.9 percent and Islamic bank Masraf Al Rayan added 0.5 percent.

Saudi Arabia’s index gained 0.2 percent in the first 15 minutes of trade. Construction and engineering contractor Abdullah Al Khodari jumped 3.7 percent, on hopes the construction sector is due for a surge in demand following the 2.5 percent land tax on undeveloped urban commercial and residential land, approved by the Saudi cabinet late last week.

The tax may push more land out into the market where it can be developed. But companies with large land banks could lose; NCB Capital said in a note that the land tax would have a negative impact on Dar Al Arkan, whose shares were flat on Monday morning.

Source: Reuters