Mideast Stocks Head Warily Into May After April Gains: Inside EM

Middle East stock markets were mixed as investors looked for direction on the first trading day of the month following gains in April.

The main indexes in Kuwait, Oman and Dubai each rose 0.7% on Sunday, while the gauge in Abu Dhabi added 0.5%. Saudi Arabia’s Tadawul All Share Index led losses with a 0.5% retreat. Qatari and Israeli markets were little changed. Trading in Bahrain and Egypt was closed for holidays.

Though oil, a key source of revenue in the Gulf, dropped on Friday, it finished April 5.8% higher amid signs of a revival in global fuel demand. OPEC and its allies see world consumption rebounding by 6 million barrels a day this year, a potential boost to shares in Saudi Arabia, the world’s biggest crude exporter.

Mideast Stocks Head Warily Into May After April Gains: Inside EM

A recent rally in Saudi financial stocks was driven mostly by “enormous growth” both for the fourth quarter and the first three months of 2021, said Jaap Meijer, the head of equity research at Arqaam Capital in Dubai.

Two-thirds of growth is coming from retail mortgages and consumer credit, he said, adding that Riyadh-based Al Rajhi Bank is taking 50% of the mortgage market growth “as well as 80%” of consumer loans.

Shares in Al Rajhi were little changed Sunday.

HIGHLIGHTS
  • The MSCI EM Stocks Index slipped 0.4% last week, trimming the increase in April to 2.4%
  • EM Review: Emerging Currencies Gain on Fed Patience, Stocks Drop
  • More: Iran, U.S. Inch Toward Nuclear Deal With Sanctions Consensus

MIDDLE EASTERN MARKETS:

  • Saudi Arabia will provide up to SAR2b ($533.4m) to fund 113 tourism projects this year, as the oil-rich nation aims to expand the sector under Crown Prince Mohammed bin Salman’s plan to diversify the economy

    • Jabal Omar Development and cement makers including Qassim Cement, Arabian Cement and Eastern Province Cement rose as much as 1.9%
  • Dubai’s DFM General Index climbs 0.7%

    • Dubai Islamic Bank falls 0.2%, extending a decline of 1.6% last week after posting 1Q numbers described as “weak” by analysts at CI Capital
  • Qatar’s QE Index extends drop to a third session to retreat 0.1%, the most in the Gulf, with Industries Qatar down 0.2% and dragging the index down the most

COMMENTS:

  • The United Arab Emirate’s deferred-program extension until mid-2022 is good news for local lenders, according Bloomberg Intelligence analyst Edmond Christou. That’s because it allows “time for cash flow to improve as the economy recovers and loan restructuring on affordable-payment terms,” he writes in a note.

FINANCIAL RESULTS:

  • Abu Dhabi Islamic Bank (ADIB UH) Net Income of 607.6m Dirhams, +125% y/y
  • Dubai Investments (DIC UH) 1Q Net Income of 123.8m Dirhams vs. loss 6.79m y/y
  • Dallah Healthcare (DALLAH AB) 1Q Profit of 54.6m Riyals, +184% y/y, estimate 30.4m
  • Saudi Hardware (SCH AB) 1Q Profit 15.6m Riyals, +33% y/y, estimate 20.3 million
  • Riyad Bank (RIBL AB) 1Q Profit 1.35b Riyals, -8.3% Y/y, Est. 1.18b
  • Saudi British Bank (SABB AB) 1Q Profit 970m Riyals, -0.1% Y/y, Est. 655m
  • Gulf Int’l Services (GISS QD) 1Q Loss 5.5m Riyals Vs. Profit 8.72m
  • Burgan Bank (BURG KK) 1Q Profit 5.1m Dinars Vs. 17.2m Dinars Y/y

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