Most major Gulf stock markets slipped on Thursday despite stronger oil prices, as low trading volumes indicated retail investors remained cautious.
Brent crude surged 5 percent on Wednesday, after Saudi Arabia’s oil minister said oil demand was growing and data showed Chinese factories were producing more than expected.
That was positive news for the Saudi stock market, but its main index inched down 0.1 percent as trading volume remained modest and shares of telecommunications operator Mobily remained suspended following another shock revision of its 2014 earnings on Wednesday.
The key petrochemical and banking sectors barely moved, while telecommunications were mixed after suffering a sell-off due to Mobily in the previous session.
Saudi Telecom, which as the largest player in the sector could benefit from Mobily’s slump, gained 1.5 percent. Zain Saudi, the smallest mobile operator, fell 3.1 percent.
Al Rajhi Bank, which will pay a 0.75 riyal per share cash dividend next week, edged up 0.4 percent.
The latest Reuters survey of regional asset managers showed on Thursday that Middle East funds are increasingly positive towards Saudi Arabia as the kingdom prepares to open its bourse to direct foreign investment in coming months.
Fifty-three percent of respondents said they expected to increase their Saudi equity allocations in the next three months, while none intended to cut them.
Abu Dhabi’s index added 1.2 percent largely because of Etisalat, the United Arab Emirates’ largest telecommunications firm, which jumped 3.9 percent after posting net profit of 2.1 billion dirhams ($572 million) for the fourth quarter, a 45 percent increase year-on-year.
Three analysts polled by Reuters had on average forecast Etisalat, the Gulf’s second biggest telecommunications operator by market value, would make a quarterly profit of 2.43 billion dirhams.
But investors may be relieved about the limited impact so far from the troubles of Mobily, whhich is Etisalat’s Saudi Arabian affiliate. Etisalat proposed a 0.35 dirham per share cash dividend for the second half of 2014, flat year-on-year, and a 10 percent bonus share issue.
At 12.05 dirhams, the stock closed just above a major chart barrier at 11.95-12.00 dirhams, its peaks in May and July 2014. A clean break – two straight daily closes – would point up to the March peak of 12.60 dirhams.
First Gulf Bank rose 1.1 percent after its executives said on Wednesday that they expected the bank to achieve loan growth of 9-11 percent in 2015.
Dana Gas jumped 2.2 percent after index compiler FTSE said it planned to increase the stock’s weighting in its global index by 3 percent.
The weighting of Dubai’s Arabtec will increase 11 percent and the stock gained 1.9 percent, outperforming the Dubai index, which slipped 0.1 percent.
Another index compiler, MSCI, is set to effectively double Arabtec’s weighting in its emerging market index from March. VTB Capital has estimated the change could drive up to $12 million in passive fund inflows and up to $101 million of inflows by actively managed funds.
Qatar’s market edged down 0.2 percent as lenders Qatar National Bank and Qatar Islamic Bank fell 1.3 and 1.6 percent respectively. Both banks have paid 2014 dividends this month, and some investors may be switching to other stocks – or other Gulf markets – until the next payout season.