No One in Town to Lift Gulf Stocks Even After Crude Oil’s Gains

(Bloomberg) -- Oil’s best week in five months failed to spur gains in Gulf equities as trading volumes plunged.

Bloomberg’s GCC 200 Index, a gauge of the largest and most liquid companies in the six-nation Gulf Cooperation Council, slipped 0.1 percent for a third day of declines. Kuwait’s SE Price Index also dropped 0.1 percent, Dubai’s DFM General Index fell 0.4 percent and Qatar’s QE Index lost 0.2 percent.

Emerging-market stocks retreated on Friday as investors struggled to discern the timeline for an increase in U.S. interest rates. Meanwhile oil, which drives much economic spending in the GCC, climbed above $50 and entered a bull market amid speculation that OPEC talks next month will lead to an output freeze.

“Oil going up isn’t a new trend, it’s within the trend and expectations,” said Nabil Rantisi, managing director of Abu Dhabi-based Mena Corp. Financial Services, one of the biggest brokerages in the United Arab Emirates. “There’s no clear direction. It’s holiday season, nobody is in town. The markets simply lack any catalyst, and with no catalyst we’re going nowhere.”

About 144 million shares traded on Dubai’s benchmark, less than half of the six-month average, according to data compiled by Bloomberg. On Abu Dhabi’s and Saudi Arabia’s measures the amount of shares changing hands was about 50 percent below the average.

Bahrain’s BB All Share Index climbed 0.7 percent and Oman’s MSM 30 Index, where some of the day’s trades were canceled because of a technical issue, added 0.1 percent.

Saudi Valuations

The Tadawul All Share Index dropped 0.2 percent. Saudi equities are now trading at about 12 times expected earnings, according to data compiled by Bloomberg. That’s near the lowest valuation in four months and down from more than 16 times in June 2015.

The kingdom’s Capital Market Authority approved regulations on book-building in IPOs that include qualified foreign investors, according to a statement posted on the regulator’s website after the end of trading on Thursday. The kingdom is adopting a series of measures to increase international participation in one of the world’s most restricted exchanges following a halving of oil prices in the past two years.

Al Rajhi Bank was the biggest contributor to declines, dropping 0.7 percent. Saudi Arabian Mining Co. lost 1.7 percent. While no shares retreated more than 4 percent, 119 companies fell and 42 rose.

Abu Dhabi Ship Building Co. and Arkan Building Materials Co. were the two biggest gainers on a percentage basis in Abu Dhabi, climbing 11 percent and 4.8 percent respectively. In Bahrain, Arab Banking Corp. rose the most, advancing 6.3 percent.

Israel Sell Sign

Israel’s TA-25 Index rose 0.2 percent at the close in Tel Aviv, after gaining for a third week. The benchmark gauge has dropped 3.8 percent this year and 40 percent of its members closed last week with a sell signal, the highest proportion in the world after Germany’s DAX Index, according to moving average convergence-divergence analysis.

Cellcom Israel Ltd., the country’s biggest cellular provider by subscribers, rose 2.4 percent to 29.75 shekels, the highest level since June 9. The company said it is preparing for a potential debt sale.

The shekel rose for a second day on Friday against a basket of major currencies, reaching the highest level since at least 1999. The currency’s 14-day relative-strength index against the U.S. dollar last week signaled that it may be poised to reverse direction.

Egypt Dollar Trade

Egypt’s EGX 30 Index advanced 0.4 percent. Speculation the North African nation will devalue its currency after it reached an initial $12 billion loan agreement with the International Monetary Fund boosted equities by a world-beating 20 percent this quarter. More than a third of EGX 30 Index members are displaying a trading pattern that suggests a decline.

Telecom Egypt gained 3.1 percent to the highest since April 2015. The shares rose for a second day after the country’s telecom regulator set the deadline for local operators to apply for a mobile 4G license, paving the way for the state-run monopoly landline company to offer mobile services.

--With assistance from Ahmed A. Namatalla To contact the reporters on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net, Deema Almashabi in Riyadh at dalmashabi@bloomberg.net, Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net. To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Claudia Maedler, Matthew Kalman