MIDEAST STOCKS-Markets may rebound modestly on global bounce
The Saudi Arabian stock market

DUBAI: Middle East stock markets may rebound modestly on Sunday in response to Friday’s jump in global bourses, which were boosted by an interest rate cut in China.

Gulf markets dropped on Thursday, led by Saudi Arabia, because of worries that low oil prices would force Riyadh into spending cuts and other fiscal reforms that would hurt growth and corporate profits. This could dampen the whole region.

But Friday’s global market bounce – the Dow Jones industrial average climbed 0.9 percent – may encourage some cautious buying-back of beaten-down stocks. Oil prices closed Friday roughly flat from their levels during Gulf hours on Thursday.

As third-quarter earnings reporting season picks up pace in the United Arab Emirates, Union National Bank has missed estimates; it posted a 12.4 percent fall in third-quarter net profit to 480.59 million dirhams ($130.9 million), while analysts polled by Reuters had forecast an average of 541.8 million dirhams.

A major reason for the drop was loan impairments, which jumped to 199.8 million dirhams from 126.9 million dirhams – possibly a negative signal for other UAE banks if cheap oil starts to slow the economy in some areas.

In Kuwait, however, Kuwait Finance House, the country’s biggest Islamic lender, reported a 21.6 percent rise in third-quarter net profit to 43.4 million dinars ($143.8 million). Analysts had forecast 33.5-41.0 million dinars.

Egypt’s stock index fell 0.8 percent on Thursday as liquidity migrated from other stocks to property developer Amer Group, which resumed trading after a three-day suspension, and Porto Group, the new spin-off from Amer. That impact may fade on Sunday, allowing the market to recover.


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