DUBAI: UAE and Qatar markets closed higher for the week, but buying momentum slowed yesterday as cautious investors waited to see if the US Federal Reserve would launch another round of money printing to support the world’s largest economy.
Abu Dhabi’s Etisalat helped lift the UAE capital’s index to a six-month high after the telecom operator sold a stake in Indonesia’s PT XL Axiata.
Shares in Etisalat gained 1.1 percent to their highest close since June 25. The Gulf’s No.2 operator said it raised about $510 million from the sale of a 9.1 percent stake in Axiata. It has retained a 4.2 percent holding.
Abu Dhabi’s measure rose 0.3 percent to its highest close since March 15, up 1.8 percent for the week.
“We have seen enough positive signals globally and locally, that even if there is no QE3 (quantitative easing), the news in the past days justifies such a rally,” said Sebastien Henin, portfolio manager at The National Investor.
The US Federal Reserve appears set to launch a third round of quantitative easing on Thursday.
Back in Abu Dhabi, banks stocks also gained. First Gulf Bank and National Bank of Abu Dhabi rose 0.2 and 0.3 percent respectively. FGB is up 28.4 percent 2012, outperforming the main index, which is up 8.6 percent.
“In markets like the UAE, the worst is behind us and the future is bright,” said Sebastien Henin, portfolio manager at The National Investor.
“For the medium and long term, there are names you could buy right now like FGB and NBAD. When non-performing loans reach a peak, it will be a major catalyst for the market and people will be looking at banks in a different way.”
The central bank this week said finalyzing debt restructuring deals with various entities would likely raise UAE banks’ non-performing loans to a peak around an average of 8 to 9 percent, up from 7.2 percent at 2011-end.
Dubai’s index rose 0.2 percent. It has traded within a 30-point range for the last three weeks as investors chased short-term gains due to a lack of catalysts to attract longer-term buyers.
In Qatar, the measure fell 0.09 percent, retreating after Wednesday’s 1.1 percent rise, its largest in 12 months after Germany’s approval of euro zone’s new bailout fund lifted investor risk appetite. The bourse was up 1.1 percent for the week.
Egypt’s index fell 1.1 percent a day after reaching its highest level since the uprising that toppled Hosni Mubarak, as investors offloaded holdings to cash in on a 12-week rally.
“Sellers appeared in the market yesterday and this is just a continuation,” said Teymour el-Derini at brokerage Naeem.
Bourse trading has picked up since a new president took office in June and formed a technocratic government that has appealed to foreign donors to support the struggling economy.
Buying by mostly retail investors, optimistic the government can avert a balance of payments crisis, has made Egypt’s equity market among the world’s top performers in 2012.
Traders said some of the foreign investors who were avoiding Egypt for fear of a sharp currency devaluation were taking a renewed interest.
“We might lose another 100 points but it would just be a breather,” added Derini.
Elsewhere, Kuwait’s measure ended 0.7 percent lower, down for a fourth time this week.
The market corrected following a recent rally. The index rose 4.6 percent between Aug. 12 and Sept. 6 after slumping to an eight-year low on political and financial woes.
UAE, Qatar markets close higher
