Persian Gulf Shares Decline on U.S. Debt Concern; Shuaa Capital Retreats

Persian Gulf shares fell for the first time in six days as concern about progress in talks to raise the debt ceiling in the U.S., the world’s biggest economy, outweighed higher profits at financial services companies.

The Bloomberg GCC 200 Index (BGCC200), which tracks the biggest 200 companies in the region, declined 0.1 percent at the 3:30 p.m. close in Riyadh. Almost two shares fell for every one that rose. Dubai’s benchmark DFM General Index (DFMGI) retreated 0.2 percent to 1,520.47 the lowest close since June 29. Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, dropped the most in a week. Emirates NBD PJSC (EMIRATES), the biggest bank in the United Arab Emirates by assets, slid to the lowest level in almost a month.

“Turnover is very low due to summertime and the fact that Ramadan is approaching, along with the volatility in international markets because of the debt crisis in Europe and the U.S.” said Marwan Shurrab, assistant fund manager and chief trader at Dubai-based Gulfmena Alternative Investments. “We are seeing mostly positive earnings and this is supposed to help but people are reluctant to participate.”

U.S. lawmakers must agree on a plan to boost the government’s $14.3 trillion debt limit and avert a default by Aug. 2. House Speaker John Boehner said yesterday he and the White House are “not close to an agreement” following a meeting with House Republicans in which the speaker was described as in a gloomy mood. Euro-area leaders announced 159 billion euros ($228 billion) in new aid for Greece July 21.

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National Bank of Ras Al-Khaimah (RAKBANK), the lender known as RAKBank, rose 1.1 percent to 4.7 dirhams after second-quarter profit surged 23 percent. United Development Co. (UDCD), a Qatari investment company, advanced 0.9 percent, the most since June 9, to 20.4 riyals after first-half profit increased to 346.8 million riyals ($95 million) from 340.9 million riyals.

About 52 million shares traded in Dubai, compared with a six-month daily average of about 133 million shares, according to data compiled by Bloomberg. In Abu Dhabi, about 26 million shares traded compared with a six-month daily average of 77 million, the data show. Abu Dhabi’s ADX General Index (ADSMI) fell 0.2 percent

Shuaa tumbled 4.7 percent to 95 fils, the biggest decline since July 17. The Dubai-based company is scheduled to report earnings this week. Emirates NBD lost 2.4 percent to 4.10 dirhams, the lowest since June 28.

Qatar’s measure added 0.1 percent, while Saudi Arabia’s Tadawul All Share Index (SASEIDX) and Kuwait’s SE Price Index rose less than 0.1 percent. Oman’s benchmark index retreated 0.3 percent and Bahrain’s measure lost 0.4 percent.

In Israel, the benchmark TA-25 Index rose 0.3 percent. The yield on the benchmark 5 percent Mimshal Shiklit bond due January 2020 increased one basis point, or 0.01 percentage point, to 4.99 percent.

Egypt’s market is closed for a national holiday.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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