Investors chase MSCI index picks among UAE stocks

Abu Dhabi's bourse rose to its highest level in eight years on Thursday, largely on the back of four stocks that look likely to be included in the MSCI emerging markets index.

Most other markets in the region also gained, but several weak first-quarter earnings reports and other negative news dragged down Saudi Arabia's stock market.

Abu Dhabi's index rose 2.0 percent to 5,172 points, surpassing its 2008 peak of 5,159 points and reaching its highest level since January 2006. If the break is confirmed next week, there will be no major technical resistance left before the record high of 6,238 hit in 2005.

First Gulf Bank rose 3.8 percent, National Bank of Abu Dhabi climbed 3.5 percent, Aldar Properties was up 3.3 percent and Abu Dhabi Commercial Bank added 1.9 percent.

The four stocks are all on MSCI's provisional list for inclusion in its emerging markets index when it upgrades the United Arab Emirates and Qatar markets at the end of May, which will bring fresh foreign investment.

"I think investors are looking at them as candidates for the MSCI upgrade," Ali Adou, portfolio manager at The National Investor, said of NBAD and FGB.

Thursday's rise brings Abu Dhabi's gains this year to 20.6 percent, making it the region's second best peformer after Dubai with 43.6 percent, and ahead of Qatar with 19.4 percent.

DUBAI, QATAR

Dubai's main index rose 1.1 percent, largely thanks to developer Emaar Properties, which climbed 3.5 percent to a fresh five-year high of 10.50 dirhams. As Dubai's biggest listed firm, Emaar looks certain to be included in the emerging markets index.

Another potential index constituent, builder Arabtec Holding, rose 1.2 percent.

Lender Emirates NBD, which said this week it may write back provisions on its exposure to conglomerate Dubai World, added 3.0 percent.

Qatar's index gained 0.2 percent to 12,397 points, approaching major technical resistance on its June 2008 intra-day peak of 12,637 points. The benchmark's historical high of 13,067, hit in 2005, is also not far off now.

Shares in Qatar National Bank edged down 0.05 percent to 195.90 riyals after it reported a 13.7 percent rise in first-quarter profit, in line with analysts' forecasts.

In early trade the stock hit technical resistance at 199.00 riyals, the February peak, but then retreated. The stock rose 1.3 percent on Wednesday before the earnings report.

Some investors focused on other banks instead. Qatar International Islamic Bank jumped 6.6 percent, Qatar Islamic Bank rose 3.5 percent and Commercial Bank of Qatar climbed 2.1 percent.

SAUDI, EGYPT

Saudi Arabia's bourse bucked the regional uptrend and closed down 0.4 percent as food, banking, retail and petrochemical sectors weighed on the index.

Several Saudi companies have disappointed investors with their first-quarter earnings. The latest one was Saudi International Petrochemical Co (Sipchem), which missed analysts' forecasts by a wide margin on Thursday after unplanned shutdowns limited its first-quarter net profit increase to 6.5 percent.

Sipchem made a profit of 68.7 million riyals ($18.3 million) in the quarter, while four analysts polled by Reuters on average had forecast 159.4 million riyals. The stock fell 3.9 percent.

Egypt's bourse rose 1.7 percent as it continued to recover from more than a week of heavy profit-taking.

Telecom Egypt gained 2.1 percent after announcing a 2013 dividend of 1 Egyptian pound per share on Thursday, even though the payout fell from 1.30 pounds a year earlier.

Shares in property developer Amer Group surged 9.0 percent to 1.57 pounds after brokerage Naeem raised its target price for the stock to 1.71 pounds from 0.70 pounds .

THURSDAY'S HIGHLIGHTS

ABU DHABI: The index gained 2.0 percent to 5,172 points.

DUBAI: The index rose 1.1 percent to 4,839 points.

QATAR: The index added 0.2 percent to 12,397 points.

SAUDI ARABIA: The index slid 0.4 percent to 9,509 points.

EGYPT: The index climbed 1.7 percent to 7,899 points.

KUWAIT: The index edged up 0.03 percent to 7,574 points.

BAHRAIN: The index slipped 0.5 percent to 1,382 points.

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