Sunday, Apr 08, 2012


 
Saudi SE             7862.51                -0.42% 
Dubai FM             1686.50                -0.99% 
Abu Dhabi SM         2558.98                -0.19% 
Kuwait SE            6145.50                -0.21% 
Doha SM              8825.18                -0.28% 
Muscat SM            5827.19                +0.36% 
Bahrain SE           1141.25                -0.02% 
Cairo SE             4827.02                -0.23% 
Amman                2005.82                +0.13% 
 
ICE Brent $/bbl       123.43                +0.82% 
Gold $/troy oz       1630.10                +0.45% 
Euro-USD                1.31                +0.00% 
DJIA                13060.14                -0.11%

By Tim Falconer

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Persian Gulf stocks will likely adopt a cautious tone Sunday after a disappointing U.S. jobs report late last week undermined views that the recovery of the world's biggest economy was gaining momentum, while fears of a prolonged recession in Europe will also keep local investors on edge as first quarter earnings season gets underway.

"First quarter earnings will be the first since the markets have taken off," said Paul Gamble, head of research at Jadwa Investment in Riyadh. "If some of the leading companies come in below investor expectations we could see a notable pull back in share prices, given the weaker news flow from global markets in recent days. Alternatively, if company performance is viewed as good, it should support confidence that the rally can continue."

On Friday, the U.S. government said the economy added just 120,000 jobs in March, well short of expectations. Stock and commodity markets were closed, but treasurys jumped, the dollar fell and stock futures dropped about 1%, suggesting the Dow Jones Industrial Average may fall when it reopens after the Easter break on Monday.

Meanwhile, new strains surfaced in European markets on Thursday as a slide in the euro forced Switzerland's central bank to intervene in currency markets and Spanish bond yields climbed to their highest level this year, a reminder that the euro zone's sovereign-debt crisis remains far from resolved despite an enormous injection of cash into the banking system by the European Central Bank.

SAUDI ARABIA: The benchmark Tadawul Index closed down 0.4% at 7862.51 Saturday.

Saudi Arabia's Almarai Co. (2280.SA), the region's largest dairy producer, said Saturday its first-quarter net profit edged up 2.9% to 242.1 million Saudi riyals ($64.6 million), compared with the year earlier, but missed most analyst forecasts as higher selling and distribution costs weighed. Its shares ended down 4.9% at SAR68.50.

Elsewhere, Saudi Basic Industries Corp. fell 0.9% to SAR108.10. The company is keen on investing in startups in Europe, the U.S. and China through its venture capital arm Sabic ventures, company officials said Friday in Shanghai.

U.A.E.: Dubai's market closed 1% lower at 1686.50 Thursday. In Abu Dhabi, the benchmark index there finished down 0.2% at 2558.98.

Strategists at Beltone Financial maintained an equalweight recommendation on DFM and ADX, citing a cautious outlook for the UAE economy, given the challenges of weakening global demand and reduced fiscal stimulus from Abu Dhabi.

"We believe that Abu Dhabi continues to look more attractive than Dubai, after the recent run," the Beltone team said.

Credit Suisse analysts raised DP World's target price to $14.81 a share from $14.70 "to reflect the updated capacity pipeline and the better margin outlook." DP World shares ended Thursday 1.5% lower at $11.53.

Elsewhere, shares of Du dropped 4% to AED3.11, while Etisalat fell 0.1% to AED8.73.

KUWAIT: The market finished 0.2% down at 6145.50 Thursday.

QATAR: Doha's market closed Thursday 0.3% lower at 8825.18.

Equity strategists at Beltone Financial said Qatar has under-performed regional peers, maintaining it has fundamental upside.

"After Qatar's star performance in 2011, institutional investors started allocating some funds to other distressed markets in early 2012. Additionally, lower dividend payout by Qatari banks have affected their share price performances negatively," they added.

In terms of stocks, Qatar National Bank fell 0.3% to QAR135.50. Qatar's slowing economy and falling liquidity in the banking system was behind Qatar National Bank's low quarterly loan growth of 3.7% in 1Q, said NBK analyst Raja Ghoussoub. He added that decreasing loan growth compared to 4Q was expected. "This was the lowest [quarterly] loan growth for two or three years due to decreasing economic growth in Qatar and a less liquid situation."

BAHRAIN: The main gauge of stocks closed flat at 1141.25 Thursday.

OMAN: Muscat's market ended 0.4% higher at 5827.19 Thursday.

EGYPT: The market closed down 0.2% at 4827.02 Thursday.

Capital Economics reckons a devaluation of the Egyptian pound is more likely than not, even if the government reaches an agreement with the IMF this month. After all, comparatively high inflation, against the backdrop of a tightly managed exchange rate, has eroded Egypt's competitiveness over the past five years, it says. "The pound appears to be over-valued by around 15% to 25%. The only issue is whether the devaluation is orderly or disorderly," Capital Economics goes on to say. On the bright side, in the wake of devaluation, capital inflows and exports should increase, which should prove positive for growth in the medium to long-term, it argues.

On a stock level, Sixth Of October Development dropped 0.7% to EGP15.15. HSBC lowered SODIC's target price to EGP20, from EGP25. "The government has taken away Eastown land, and, even if this is not final, investors should not expect a quick and easy resolution, in our opinion," it said.

NEWS FROM AROUND THE GULF: Dubai Holding, an investment vehicle owned by the emirate's ruler, said Thursday its private equity arm Dubai International Capital has reached an agreement with lenders on a $2.5 billion debt deal, while it's confident that the Dubai Group restructuring will be concluded successfully.

The Iraqi government has prequalified Syria's national oil company, a target of increased international sanctions against the Syrian government, for Iraq's fourth energy licensing auction scheduled May 30-31, the oil ministry said in an announcement posted on its website.

Saudi Basic Industries Corp. (2010.SA), or Sabic, broke ground on a $100 million technology center in Shanghai on Friday, focusing on alternative energy and new materials for automotive and construction.

-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

08-04-12 0432GMT