MSCI will include DIB in EM index: Analysts

Dubai index gained on Thursday, pushed up Dubai Islamic Bank stock on expectations that the Shariah-compliant bank will be included in MSCI’s Emerging Market index next month and also by its decision to increase foreign ownership.

Dubai's index added 0.7 per cent to 4,762 points on moderate volume, remaining below this month's peak of 4,840 points.

Dubai Islamic Bank contributed most to the move, adding 3.2 per cent as the bourse officially raised the cap on foreign ownership of its stock to 25 per cent from 15 per cent.

Thomson Reuters data shows investors from outside the Gulf increased their holdings to 10.3 per cent of shares on Thursday from 10.1 per cent on Wednesday while Gulf investors from outside the United Arab Emirates still held 4.8 per cent.

Some analysts believe index compiler MSCI will include Dubai Islamic Bank in its emerging market index at the end of May, though it was absent from the provisional list of constituents published last year.

"It is probably because of a lack of catalysts," Amer Khan, senior executive officer at Shuaa Asset Management, said of the lower trading activity in recent days.

Modest gains posted by most blue chips ahead of first-quarter earnings reports lifted Abu Dhabi's bourse 0.5 per cent to 5,157 points, close to the eight-year closing peak of 5,172 points which it hit last Thursday.

In Bahrain, Ahli United Bank (AUB), Bahrain's biggest lender, single-handedly lifted the local bourse's index by 0.7 per cent. The move came after several bankers familiar with the situation told Reuters on Wednesday that AUB was evaluating a sale or a merger with a rival bank in a potential $5 billion deal.

The bank said on Thursday it could not comment, but the report suggested the possibility of consolidation in the Bahraini banking sector that could benefit the whole industry. The central bank has been encouraging mergers in the sector.

AUB shares listed on the Bahrain stock exchange jumped 3.2 per cent; the shares cross-listed in Kuwait were up 0.9 per cent. Shares in the bank's Kuwaiti subsidiary rose 1.5 per cent.

Saudi Arabia's bourse added 0.3 per cent. Property developer Dar Al Arkan jumped 3.5 per cent after it reported a 4.3 per cent increase in first-quarter net profit on Thursday, beating analysts' forecasts.

The kingdom's largest listed property developer made a net profit of 247.9 million riyals ($66.1 million) in the quarter while three analysts polled by Reuters had expected, on average, a profit of 222.3 million riyals.

Qatar

Qatar's bourse continued to outperform the region on Thursday but failed to break through major technical resistance. Ahli United Bank lifted Bahrain's stock market on news it might be sold or merge.

The Doha bourse closed up 0.8 per cent at 12,551 points, retreating from an intra-day peak of 12,679 points, the highest level since September 2005. It faces chart resistance at 12,637 points, its 2008 peak.

Islamic lenders contributed most to the increase: Masraf Al Rayan rose 5.8 per cent, Qatar International Islamic Bank added 3.1 per cent and Qatar Islamic Bank (QIB) gained 2.7 per cent.

The shares rose on speculation that Ezdan Holding Group might look to buy stakes in more sharia-compliant businesses, a fund manager investing in Qatar said.

Last month Ezdan, whose shares jumped their daily limit of 10 per cent on Thursday, bought a stake of more than 20 per cent in Islamic investment firm Islamic Holding Group. Early this month, The Peninsula newspaper quoted the company's chief executive as saying it would announce big investments in two more listed sharia-compliant companies by June.

Also, QIB reported a 15 per cent increase in first-quarter net profit late on Thursday. The bank earned 335 million riyals ($92 million), slightly above the average estimate of eight analysts polled by Reuters who had expected 328 million riyals.

THURSDAY'S HIGHLIGHTS

QATAR: The index rose 0.8 per cent to 12,551 points.

DUBAI: The index gained 0.7 per cent to 4,762 points.

ABU DHABI: The index climbed 0.5 per cent to 5,157 points.

SAUDI ARABIA: The index added 0.3 per cent to 9,531 points.

EGYPT: The index rose 0.3 per cent to 8,104 points.

KUWAIT: The index slid 0.9 per cent to 7,451 points.

BAHRAIN: The index rose 0.7 per cent to 1,389 points.

OMAN: The index added 0.3 per cent to 6,844 points.

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