Bank shares weigh on Abu Dhabi bourse; other Gulf markets steady

Main building of Dubai International Financial Centre, the world's fastest growing international financial centre. (Shutterstock)
Updated 18 November 2019

Bank shares weigh on Abu Dhabi bourse; other Gulf markets steady

DUBAI: Abu Dhabi’s stock market fell sharply on Sunday, weighed down by the country’s largest lender First Abu Dhabi Bank, while other Gulf markets were mostly flat.

In Abu Dhabi, the index slid 1.5 percent, its biggest fall since August, as First Abu Dhabi Bank (FAB) retreated 2.4 percent, while telecoms firm Emirates Telecommunications was down 1.2 percent.

Among other stocks, Aldar Properties declined 2.7 percent, extending losses for a fourth straight session.

The property developer reported on Nov. 12 a near 8 percent drop in third quarter profit.

Arqaam Capital had a net profit forecast of AED435 million and EFG Hermes had projected AED429 million, whereas the firm reported a net profit of AED387 million.

In Saudi Arabia, the index reversed course to gain 0.1 percent driven by a 2.4 percent rise in Al-Rajhi Bank and a 0.9 percent increase in Alinma Bank.

Elsewhere, Saudi Paper Manufacturing advanced 2.9 percent following an approval for a SR52 million ($13.87 million) grant.

Dubai’s index edged up 0.1 percent, led by a 4.7 percent leap in Emirates NBD. On Wednesday, the emirate’s largest lender confirmed the sale of 31 million shares in Network International Holdings for $205 million.

Union Properties rose 2 percent after reporting third quarter losses that were narrower than in the previous quarter. However, the gains were capped by losses in Arabtec Holding, which dived 9.6 percent, its biggest fall since May.

The Dubai-listed contractor swung to a third quarter loss of AED437.4 million ($119.09 million), compared with a profit of AED67.5 million a year ago.

The Qatari index was down 0.5 percent with the Gulf’s largest lender Qatar National Bank decreasing 1.1 percent and Industries Qatar losing 1 percent.

Outside of the Gulf, Egypt’s blue-chip index edged up 0.1 percent with Commercial International Bank adding 0.7 percent. 

However, Sidi Kerir Petrochemicals closed down

6.4 percent, stretching its losing streak for a fifth session. On Tuesday, the firm reported a steep fall in its nine-month net profit.

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$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.