Abu Dhabi Shares Drop, Tracking Emerging Markets; Dubai Declines

Abu Dhabi stocks fell, following a slump in emerging markets last week, as Aldar Properties PJSC’s (ALDAR) quarterly profit missed estimates. Dubai shares also dropped.

The ADX General Index retreated 1.2 percent to 4,992.52 at the close, the biggest decline since July 20. Aldar, the sheikhdom’s biggest developer, lost 3.2 percent, and First Gulf Bank PJSC (FGB), the lender controlled by the emirate’s ruling family, slid 1.1 percent. Dubai’s DFM General Index fell 0.2 percent to 4,822.25.

Emerging-market stocks posted their biggest weekly loss since March as Samsung Electronics Co. reported lower-than-estimated earnings and Argentina’s bond default sapped investor demand for riskier assets. Aldar’s second-quarter profit of 506 million dirhams ($138 million) missed analysts’ estimates of 583 million dirhams.

“This is a spillover of the global market sentiment over the weekend coupled with what is happening in Argentina,” Ahmed Shehada, head of advisory and institutions at NBAD Securities LLC, said by phone from Abu Dhabi. “Aldar’s results, which are below expectations, didn’t help.”

Aldar, which has the fourth-highest weighting on the benchmark ADX General Index (ADSMI), fell as much as 5.8 percent. The shares closed at 3.65 dirhams. First Gulf Bank dropped to 18 dirhams.

Dubai’s Arabtec Holding PJSC (ARTC), the United Arab Emirates’ biggest publicly-traded construction company, climbed 0.7 percent to 4.28 dirhams.

“There is expectation of some sort of a deal coming through over the next few days” that will see Abu Dhabi government-owned Aabar Investments PJSC increase its stake in the builder, Shehada said.

Israel Advances

Khadem Al Qubaisi, chairman of both Arabtec and its second-largest shareholder, Aabar, said July 2 that the state-run company is considering boosting its stake in the contractor. Aabar is in talks with former Arabtec CEO Hasan Ismaik to buy at least half of his 28.9 percent stake, a person familiar with the matter said July 16.

Ismaik resigned in June, throwing into doubt an expansion plan that helped the shares quadruple during his 15-month tenure. Concerns the builder was losing state support caused the stock to drop more than 60 percent in June, contributing to the DFM General Index’s decline of more than 22 percent in the same period.

Saudi Arabia’s Tadawul All Share Index (SASEIDX) climbed 0.9 percent as the market opened after a religious holiday. Qatar’s QE Index and Kuwait’s SE Price Index both fell 0.1 percent, while Bahrain’s BB All Share Index gained 0.1 percent and Muscat’s MSM 30 Index added 0.4 percent.

Egypt

Egypt’s benchmark EGX 30 index declined 0.3 percent to 8,802.29 at the close in Cairo. The country’s Ministry of Investment is seeking financial advisers to value 124 public-sector companies as part of a plan to restructure some of them, Al Mal newspaper reported today, citing Investment Minister Ashraf Salman.

Etisalat Misr, the phone company controlled by Emirates Telecommunications Corp., is in talks with investment banks about what may be Egypt’s largest initial public offering in almost five years, according to three people with knowledge of the matter. The IPO is planned to take place in Cairo and may raise about $500 million, the people said.

Israel’s benchmark TA-25 Index fell less than 0.1 percent to 1,392.98, as the government vowed to press on with its military offensive in the Gaza Strip. The country’s benchmark 10-year bonds rose, with the yield dropping five basis points, or 0.05 of a percentage point, to 2.72 percent.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Shaji Mathew

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