Qatar Stocks Lead Mideast Advance After Best Oil Rally Since '08

  • Brent crude rebounded Friday as producers `ready to cooperate'
  • Saudi index bucked gains on bets role in Syria may grow

Qatar stocks led an increase across most Middle Eastern equity markets after oil posted the biggest jump in seven years.

The QE Index climbed 1.2 percent, the most in more than a week, led by Industries Qatar QSC. Dubai’s DFM General Index rose for the first time in four days led by Emaar Properties PJSC, the developer of the world’s tallest skyscraper and the company with the biggest weighting on the gauge. Shares in Saudi Arabia dropped amid speculation the country may be further drawn into conflict in Syria.

Markets across the U.S., Europe and emerging nations ended a tumultuous week on a high note Friday as oil’s rebound and data showing economic expansion in the euro-area helped ease global growth concern. Brent, a benchmark for half the world’s crude, advanced after United Arab Emirates Oil Minister Suhail Al Mazrouei said producers were ready to cooperate amid “inappropriate” prices. The six-nation Gulf Cooperation Council is home to about 30 percent of proven oil reserves.

“Ongoing talks between OPEC and non-OPEC members are having an impact on investor sentiment, that finally the downside of the drop of oil prices is limited from here on,” said Tariq Qaqish, the head of asset management at Dubai-based Al Mal Capital PSC.

Brent crude rose 11 percent to $33.36 a barrel on Friday, the biggest advance since December 2008 and curbing a second weekly decline.

U.A.E. Real Estate

HSBC Holdings Plc said it expects property prices in Dubai to fall between 5 percent and 10 percent this year on weak sentiment, according to a research note on Thursday. Still, Emaar climbed 1.7 percent as the emirate’s main gauge rose 1 percent. Amlak Finance PJSC, an Islamic mortgage provider in which Emaar owns a 45 percent stake, gained 3.4 percent after reporting a 139 million-dirham profit ($38 million) for 2015.

“What we are seeing is a result of an oversold market accompanied by good results from blue-chip companies,” Qaqish said.

Dubai’s DFM Real Estate and Construction Index added 1.1 percent. Stocks on the gauge traded at as low as 5.6 times expected earnings in January, the cheapest in at least five years, according to data compiled by Bloomberg. They were at 8.3 times on Sunday.

“We’re looking at real estate and banking sector names again as the pricing became attractive after recent drops," said Nabil Farhat, an Abu Dhabi-based partner at Al Fajr Securities.

Drake & Scull International PJSC, which reported its first full-year loss after making provisions for ongoing arbitration and legal cases, rose 1.2 percent.

Aldar Fire

Abu Dhabi’s ADX General Index climbed 0.1 percent. Aldar Properties PJSC jumped 3.5 percent, the most in more than a week on a closing basis, even as Reuters reported a blaze at Abu Dhabi Plaza in Astana, Kazakhstan, a project including the company and Arabtec Holding PJSC.

Arabtec ended unchanged in Dubai after earlier rising as much as 3.6 percent. The company delayed a board meeting on its financial results for the second time this month.

Elsewhere in the U.A.E. the three-month Emirates Interbank Offered Rate, a benchmark used to price loans, dropped 1.2 basis points on Sunday to 1.02 percent, its lowest in almost two months, amid rising deposits at local lenders.

Saudi Drop

The Bloomberg GCC 200 Index, a gauge of the biggest and most liquid stocks in the region, fell 0.4 percent after shares in Saudi Arabia reversed earlier gains. The Tadawul All Share Index closed 1.8 percent lower after having risen as much as 2 percent.

Saudi stocks 30-day volatility is at about the highest in four months.

“Over the course of the day, there were heightened whispers in the market that there will be full-on Saudi participation in the Syrian crisis, so it could be a protracted affair,” said Nayal Khan, the Riyadh-based head of institutional equities sales trading at Saudi Fransi Capital. “A number of investors are seeking to sell now and revisit the market at a later stage.”

Saudi Foreign Minister Adel al-Jubeir said the kingdom has made a decision to provide special forces as part of any ground component that the U.S.-led coalition against Islamic State may lead in Syria.

Banque Saudi Fransi contributed most to declines, falling 6.8 percent to the lowest since March 2009.

Kuwait Rating

In Qatar, Industries Qatar added 2.1 percent to the highest in more than a week. Gulf International Services QSC rallied 6 percent, the largest increase in three weeks, after six days of declines.

Oman’s MSM 30 Index added 0.1 percent, while Bahrain’s BB All Share Index and Kuwait’s SE Price Index were little changed. Standard & Poor’s on Friday affirmed Kuwait’s credit rating with a stable outlook, saying the country can weather the current low oil price environment given its large fiscal and external net asset positions.

Egypt’s EGX 30 Index slipped 1 percent to the lowest level in more than three weeks. Commercial International Bank Egypt SAE, the country’s biggest publicly-traded bank that makes up a third of the index, led the drop with a 2 percent decrease. Its chairman said on Thursday the lender may sell bonds for the first time in 15 years.

Israeli Rally

Israel’s TA-25 Index rose 1 percent, the most this month, as 24 shares increased and two fell. Local gas explorers increased, with Delek Group Ltd. adding 2.5 percent and Avner Oil Exploration 1.1 percent. Prime Minister Benjamin Netanyahu testified on Israel’s proposed gas framework at the Supreme Court, warning that investment will suffer if the plan is blocked.

“The oil rally is mainly driving local gas stocks up due to the positive correlation between higher oil prices and gas demand,” Steven Shein, a trader at Psagot Investment House Ltd., said by phone. There was “also some optimism ahead of Prime Minister Benjamin Netanyahu’s appearance before the court today,” he said.

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