Kuwait Stocks Extend Advance as Banks Weigh on U.A.E. Markets

  • Kuwait equity gauge at the highest level since August 2015
  • Dubai’s Emirates NBD likely to release earnings this week

Kuwait’s main stock gauge, the Middle East’s best performer this year, rose for an eighth day, while shares in the United Arab Emirates fell as investors bet banks will boost provisions for bad loans.

Kuwait’s SE Price Index advanced 1.9 percent to the highest level since August 2015 as 107 of the measure’s 182 members gained, the most in more than two years. Traders exchanged 722 million shares, more than any other day since September 2013. Emirates NBD PJSC, the U.A.E.’s biggest bank, will probably post its 2016 earnings this week. The Dubai-based lender declined 1 percent.

“Normally banks during the fourth quarter increase their provisioning -- that is cyclical,” said Ali Adou, an equities money manager at The National Investor in Abu Dhabi. “Banks across the region will take the opportunity to clean as much as they can in terms of provisions, as it was a very difficult year.” This year’s outlook should be better if oil prices maintain current levels, he said.

  • Dubai’s DFM General Index declined 1.1 percent, Abu Dhabi’s ADX General Index decreased 0.1 percent, while Saudi Arabia’s Tadawul All Share Index gained 0.1 percent. 
  • Israel’s TA-25 Index added 0.3 percent, the biggest gain since Dec. 27.
  • Egypt’s EGX30 Index, which is having its best start to a year since 2006, advanced 0.6 percent.

Analysis

  • Most investors will look for signs Qatar National Bank’s board will consider changing limits to foreign ownership, said Julian Bruce, the head of institutional trading at EFG-Hermes U.A.E. in Dubai, a unit of the biggest publicly traded Arab investment bank.
    • The bank’s 2016 profit climbed 10 percent to 12.4 billion riyals ($3.4 billion). The lender recommends a dividend of 3.5 riyals per share for 2016, and one bonus share for every 10.
  • JPMorgan Chase & Co. raised its forecasts for the Brazilian real, Russia’s ruble and South Africa’s rand, according to a report dated Jan. 13.
  • UniCredit SpA said Turkey’s central bank will need to raise interest rates a minimum of 300 basis points on Jan. 24 to spur a “meaningful” rally in the lira.
  • Emirates NBD’s asset management unit is targeting medium-to-long term capital growth in the Saudi stock market, it said in an e-mailed statement.

— With assistance by Sharon Wrobel

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