Gulf may have modestly firm tone; Dubai’s DSI in focus

Gulf stock markets may have a modestly firm tone on Monday after the previous day’s gains, while Dubai builder Drake & Scull could be a focus of trade after it said it had completed restructuring its corporate bank debt.

MSCI’s broadest index of Asia-Pacific shares outside Japan is up 0.1 percent, having climbed 3.1 percent last week, its strongest performance in six months. Brent oil is up 12 U.S. cents at $67.74 a barrel.

Drake & Scull said that along with the debt restructuring, it had secured new credit lines and working capital facilities for its projects; lack of such liquidity had contributed to the company’s losses earlier this year.

The company also said it was in advanced talks with creditors in Saudi Arabia to complete the refinancing of about 1 billion dirhams ($272 million) of project debt there.

However, some investors may sell into any further strength of the stock. Last at 2.30 dirhams, it has already soared from around 1.70 dirhams in early November in anticipation of the good news; of five analysts following it, one rates it “hold”, two “sell” and two “strong sell” with a median target price of 1.31 dirhams, according to Thomson Reuters data.

Also in Dubai, GFH Financial may see some pressure after the company said its major shareholder Integrated Capital had reduced its shareholding to 6.72 percent from 8.01 percent. It did not give a reason.

Integrated Capital is owned by Shuaa Capital, an affiliate of Abu Dhabi Financial Group (ADFG), and the stake in GFH had provided a base for cooperation between GFH and ADFG.

In Saudi Arabia, consumer electronics retailer United Electronics Co may get a boost after saying estimated fourth-quarter net profit climbed to 57.6 million riyals ($15.4 million) from ‍​26.3 million riyals a year ago, as sales rose to 1.61 billion riyals from 1.39 billion riyals.

The sales data suggests that after a difficult 2017, the Saudi retail industry may have ended the year on a strong note, thanks to a pick-up in government spending. Source: Reuters