Middle East markets were steady, with a pause in a global
equity sell-off supporting regional sentiment as slow summer trade hurts
turnover.
Aldar climbed 4.6 percent to a three-week high as 33.7
million shares change hands, a five-fold rise on the day before.
Aldar’s 2011 bond, which matures in October 2011, is up 3.6
percent since Aug. 11, when it slumped to a 2010 low. Standard and Poors and
Moody’s have both downgraded Aldar recently, citing a lack of implicit government
backing. This has weighed on shares and bonds, but with increasing market talk
some sort of state support might be imminent, both are now up.
Aldar’s gain helped Abu Dhabi’s benchmark rise 0.2 percent.
“The UAE is trading in positive territory and a number of
reasons are being cited: trading in line with global markets, speculative
buyers entering the market anticipating the oft-expected post-Ramadan rally and
real estate names taking it up due to aggressive buying in Aldar,” said Julian
Bruce, EFG-Hermes director of institutional equity sales.
Dubai’s index climbed 0.9 percent, with property stocks to
the fore as a Reuters report detailing a July Dubai World debt restructuring
document bolstered sentiment.
“There is a kind of a relief in the market after the details
were released by Reuters, as if people worried things were worse,” said
Mohammed Yasin, Shuaa Securities chief executive.
“I didn’t see anything to frighten me. If anything, it shows
that it was well planned and Dubai World is serious in paying the debt back.”
Other analysts said the document, which revealed Dubai World
is prepared to sell prized assets to raise as much as $19.4 billion to repay
creditors, was already discounted in the market.
“Although it wasn’t public, investors big enough to impact
the market have known this since end of July when the meeting occured,” said
Jalal Faruki of Al Mal Capital. “My bet is that it is largely priced in —
action in credit markets supports that theory.”
Dubai credit default swaps were at 462 basis points on
Thursday, up slightly from 461.3 the day before.
Orascom Telecom rose 0.9 percent after a newspaper reported
Vimpelcom would hold talks on Thursday to buy a majority stake in the Egyptian
operator.
Kuwait’s banking index fell 0.7 percent, slipping from
Wednesday’s 20-month high. Banks had rallied on the back of a $104 billion
government spending plan, which lenders are slated to part-finance through
state-backed loans.
“The government will allocate funds through the banks
because the banks have the structure and people in place to do this efficiently
and complete due diligence,” said Shahid Hameed, Global Investment House head
of asset management for the Gulf region. “For banks, it will be risk-free
lending because of the government guarantee.”
In Egypt, the index rose 1.1 percent to 6,474 points.
Qatar’s index rose 0.2 percent to 7,161 points.  Oman fell 0.1 percent to 6,273 points.