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Qatar Shares Slide on Earnings, Fed Outlook; Dubai Advances

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July 15 (Bloomberg) -- Qatar shares declined after Qatar Islamic Bank posted a 35 percent decline in second-quarter profit and the Federal Reserve trimmed the growth forecast for the world’s biggest economy.

Qatar’s QE Index slipped 0.8 percent to 6,963.53, paring its gain for the week to 0.8 percent. Qatar Islamic Bank, the Gulf state’s biggest lender complying with Islamic finance rules, retreated 3.7 percent as earnings fell short of analyst estimates. Commercial Bank of Qatar slid the most since July 1. The Bloomberg GCC 200 Index lost 0.2 percent, while Dubai’s DFM General Index advanced 1 percent to 1,520.2, the highest level this month.

“On the downside, Gulf markets are highly correlated with global markets,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “Investors are waiting for more second-quarter earnings.”

Federal Reserve officials at their June 22-23 policy meeting saw no need to boost stimulus to the economy, while trimming their forecasts for growth, meeting minutes released yesterday showed. The MSCI Asia Pacific Index fell 0.9 percent, the most in two weeks and the Stoxx Europe 600 Index dropped as much as 0.6 percent before reversing declines.

Companies from Gulf Arab nations started releasing earnings this month. Qatar Insurance Co. had a 3 percent decline in second-quarter profit to 119.1 million riyals ($33 million), according to Bloomberg calculations based on first-half figures provided by the bank. The shares lost 2.3 percent today.

Nakheel Restructuring

Qatar Islamic Bank slumped the most since May 25 to 72.2 riyals. Second-quarter profit retreated to 301 million riyals, according to Bloomberg News calculations based on a first-half net income of 601 million riyals. The mean estimate of three analysts surveyed by Bloomberg was for a profit of 353 million riyals.

Commercial Bank of Qatar, the country’s second biggest bank, declined 1.6 percent to 66.9 riyals, the lowest level since July 8. Emirates NBD PJSC, the United Arab Emirates’ largest bank by assets, rose 2 percent to 2.53 dirhams, the highest since June 28.

Nakheel PJSC, the Dubai World-owned property developer hurt by a slump in home prices, yesterday said a group of its creditors “unanimously supported” a proposal on altering the terms on $10.5 billion of loans and unpaid bills. Banks were asked to respond to the proposals by August 31, said a company spokesman, who declined to give further details.

“The news on the Nakheel bond was taken quite positively by the market,” said Paul Cooper, managing director at Sarasin-Alpen & Partners Ltd. in Dubai, which oversees more than $500 million in the Middle East.

Kuwait Drops

The company plans to offer lenders interest of 4 percentage points more than benchmark rates on new loans as part of the restructuring, two bankers with knowledge of the plan said July 13. In return, lenders would agree to extend the life of the loans by five years, said the people.

Abu Dhabi’s gauge retreated 0.1 percent and Oman’s MSM 30 Index was little changed. The Kuwait SE Price Index lost 0.4 percent, while Bahrain’s gauge gained 0.2 percent. Saudi Arabia’s market was closed for the weekend.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

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

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