UAE markets resume gains in retail-driven trading

DUBAI: UAE markets resumed gains in retail dominated trading and most Gulf bourses climbed while Egypt extended losses on fears that violence could escalate further in response to the military’s call for mass rallies on Friday.
Dubai’s index climbed 0.1 percent, resuming gains after reaching a near five-year high on Tuesday.
It rallied 13.3 percent in July, with trading dominated in a few stocks. Shares in contractor Drake and Scull jumped 5.4 percent to new all-time high on speculation a strategic investor could buy a major stake in the firm, with builder Arabtec viewed by analysts as a possible buyer.
“I don’t believe the fundamentals justify the price of Drake and Scull today,” said Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services.
“Speculators are using the takeover rumor and we don’t know how true it is.”
In the capital, Abu Dhabi’s benchmark climbed 1.1 percent to a new 57-month high.
Heavyweight First Gulf Bank rose 3.6 percent and Commercial International surged 12 percent.
“Overall, valuations are still attractive in the UAE although there is a lot of retail activity in the market,” said Ali Adou, portfolio manager at The National Investor. “Cheap credit has allowed people to have access to cheap loans as banks are fighting for loan growth. Institutional investors will stick to fundamentally-sound names.”
In Qatar, the index added 0.5 percent, resuming gains after a one-session decline to hit a fresh 58-month high.
Telecom operator Ooredoo rose 1.6 percent after its subsidiary Wataniya, Kuwait’s second biggest telecommunications operator, reported a 20 percent rise in second-quarter profit, beating analysts’ estimates.
Ooredoo owns 92.1 percent stake in the Kuwaiti operator, Reuters data shows.
On the Kuwait’s bourse, Wataniya shares slipped 2.8 percent in very thin trading. The index .KWSE climbed 0.4 percent to its highest close since June 3 with small-caps dominated.
Elsewhere, Cairo’s measure slipped 0.1 percent, after a 1.7 percent slide on Wednesday. It rallied to a two-month high on Tuesday, up 20 percent since late June because of hopes for better economic management since the army overthrew president Muhammad Mursi.
Supporters of both the military and Mursi plan major demonstrations on Friday, increasing the risk of violent confrontations.
Egyptians were net sellers, while foreigners were buyers, according to bourse data.
Most of the selling pressure was absorbed in late session as bargain hunters returned.
Shares in Egypt’s largest steel maker Ezz Steel outperformed, rising 3.8 percent after the firm reported a surge in first-quarter profit and said it had secured funding for future investments.