Abu Dhabi stocks rose the most since
March on bets the government may permit foreigners to buy shares
of Emirates Telecommunications Corp. (ETISALAT), the largest publicly-
traded company in the United Arab Emirates. Saudi shares gained.
Etisalat, as the phone company is known, advanced the most
since January even after saying it’s not aware of a decision to
change the law that governs foreign ownership. The ADX General
Index (ADSMI) rose 0.6 percent, the most since March 25, to 2,454.47 at
the close in Abu Dhabi. The Bloomberg GCC 200 Index (BGCC200) climbed 0.7
percent after Saudi Arabia (SABIC)’s Tadawul (SASEIDX) rallied 1.3 percent, the
most since April 21. Bank Nizwa (BKNZ) jumped 13 percent in the trading
debut of the first Omani Shariah-compliant lender.
A law that governs Etisalat may be amended to allow foreign
and institutional investors to own the shares, Emarat Alyoum
reported last week, citing people it didn’t identify. A change
will help widen ownership of shares beyond U.A.E. citizens and
give overseas investors’ access to Etisalat, which may post a 26
percent increase in profit this year, according to the mean
estimate of eight analysts on Bloomberg.
“If the speculation is true, this would be good for the
market as it could attract liquidity to the heavy-weighted
stock, especially from foreign investors,” said Nabil Farhat, a
partner at Abu Dhabi-based Al Fajer Securities, the 21st most
active brokerage of 53 by value traded in May, according to the
Dubai Financial Market. A change in the foreign ownership
structure of the stock may help boost the U.A.E.’s chance of
being promoted to emerging market status at MSCI Inc. (MSCI), he said.
MSCI Upgrade
The U.A.E. and Qatar are up for a potential upgrade from
frontier market status at MSCI after the index provider delayed
the decision twice in 2011. MSCI cited “stringent foreign
ownership limits” such as limited availability of shares to
foreign investors as a concern. About $3 trillion of funds are
benchmarked against MSCI’s indexes globally.
Etisalat comprises 28 percent of Abu Dhabi’s index. The
shares rallied 2.8 percent, the most since Jan. 29, to 9.07
dirhams.
Etisalat said last week the company had no knowledge of a
decision to allow foreign and institutional investors to buy its
shares. “Such a decision is ultimately a federal government
decision,” Etisalat said in a statement.
About 56 million shares were traded in Abu Dhabi today,
compared with a 12-month daily average of 62 million. Abu Dhabi
Commercial Bank PJSC (ADCB), the U.A.E.’s third-biggest lender, gained
1.3 percent to 3.18 dirhams, the highest close since May 2.
Spain’s Request
Global stocks rallied last week, with the SP 500 Index (SPX)
rising 3.7 percent in its best weekly gain since December, amid
speculation central banks in Europe and the U.S. will join China
in trying to spur economic growth. The MSCI Emerging Markets
Index (MXEF) gained 1.3 percent in the period, snapping an 11-week
slump.
Spain became the fourth euro member to seek a bailout since
the start of the region’s debt crisis more than two years ago
with a request for as much as 100 billion euros ($125 billion)
in loans to rescue its banking system.
Crude oil for July delivery increased 1.1 percent last week
to $84.1 a barrel on the New York Mercantile Exchange. The Gulf
Cooperation Council, which includes Saudi Arabia, the U.A.E.,
Qatar, Oman, Bahrain and Kuwait, sits on one-fifth of the
world’s proven oil reserves.
Bank Nizwa
Saudi Arabia’s stocks climbed to 6,749.49 led by Al-Rajhi
Bank (RJHI), the kingdom’s largest lender, and Saudi Basic Industries
Corp., the world’s biggest petrochemical maker. The country is
OPEC’s biggest oil exporter.
In Oman, Bank Nizwa surged as much as 17 percent on
investor speculation demand for Shariah-compliant services will
grow. The shares, which have a nominal value of 0.100 rial,
jumped to as high as 0.119 rial before trimming gains to close
at 0.115 rial. Oman’s MSM30 Index (MSM30) decreased 0.5 percent.
Elsewhere in the Persian Gulf region, Bahrain’s measure
climbed 0.5 percent. Kuwait’s gauge and Dubai’s DFM General
Index (DFMGI) advanced 0.2 percent, while Qatar’s QE Index (DSM) fell 0.2
percent. In North Africa, Egypt’s EGX30 Index (EGX30) retreated 0.4
percent.
In Israel, the TA-25 Index (TA-25) gained 0.5 percent at the close
in Tel Aviv. The yield on the country’s 5.5 percent notes due
January 2022 rose two basis points, or 0.02 percentage point, to
4.45 percent.
To contact the reporter on this story:
Zahra Hankir in Dubai at
zhankir@bloomberg.net
To contact the editor responsible for this story:
Claudia Maedler at
cmaedler@bloomberg.net
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Article source: http://www.bloomberg.com/news/2012-06-10/abu-dhabi-shares-rise-most-in-2-months-on-etisalat-ownership-bet.html