Dubai stock index slumps, DAMAC shares surge

Dubai stock index slumps, DAMAC shares surge
Published: 17 May 2017 - 5 a.m.
By: Reuters

Gulf equity markets were firm with the Brent oil price at $52 a barrel.

In Dubai, builder DSI slumped 5 percent to 0.362 dirham, a 15-month low, after it reported a first-quarter net loss attributable to shareholders of 722.5 million dirhams versus a profit of 9.8 million dirhams in the year-ago period.

The company is in the middle of a capital restructuring plan to wipe out its accumulated losses, and has said it expects to receive a capital injection of 500 million dirhams from a Dubai-based strategic investor by mid-2017.

DAMAC rose 2.9 percent after MSCI said it would add the stock to its United Arab Emirates index. Arqaam estimated the inclusion would bring $68 million of passive fund inflows.

Dubai's stock index closed almost flat.

Banking shares were some of the top gainers in neighbouring Abu Dhabi, helping lift the index 0.4 percent. Abu Dhabi Commercial Bank rose 2.1 percent.

In Saudi Arabia, the index gained 0.7 percent in the heaviest trade since mid-January.
"At the start of the month, when oil was below $50, daily traded volume was low - now there is slightly more confidence so there is more activity, but I don't expect that to hold as the holy month of Ramadan traditionally sees low volumes," said one Kuwait-based stock broker. Ramadan starts around May 27.

Shares in construction firm Al Khodari jumped 10 percent - the daily limit - in heavy trade. One analyst said this might be a result of the company receiving overdue payments from the government, which is Khodari's main client.

The petrochemical sector was mixed, with smaller companies outperforming larger ones. Analysts at NCB Capital said the sector's bottom line in the first quarter almost doubled from a year ago and revenue rose by about 16 percent. Many stocks, however, are trading near fair value, leaving investors with little incentive to buy despite a recent rebound in oil prices.

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