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Zain Saudi at record low, Egypt developer falls, Gulf closes mixed

DUBAI: Shares in Zain Saudi, the third telecoms operator in the kingdom, fell to a record low Sunday as investors extended selling after the date to qualify for a $1.6 billion rights issue passed, while Gulf markets ended mixed. Zain cut its capital to 4.8 billion riyals from 14 billion effective Saturday, while the rights issue will start Tuesday and close eight days later.

The capital cut will help eliminate some of its accumulated losses, which stood at 10.1 billion riyals at the end of the first quarter.

Dar al-Arkan ticked up 0.5 percent, accounting for nearly two-thirds of all shares traded on the index.

The developer posted an 11 percent rise in second-quarter net profit Saturday, but missed analyst forecasts.

Some mid-small cap stocks hit limit up ahead of earnings. Food processing firm Halwani Brother and Wafa Insurance surged 10 percent each.

“People are buying on rumors of earnings. That’s why you will see sudden jumps near the end of the session,” said Tarek al-Mady, an independent Riyadh-based analyst.

The kingdom’s index eased 0.07 percent, trimming year-to-date gains to 6.8 percent.

In Egypt, investors dumped shares of Talaat Moustafa Group, which slumped 10 percent and weighed down Cairo’s main index.

Egyptian judges recommended a court should cancel the settlement of a drawn-out legal dispute over TMG’s $3 billion flagship real estate project, Madinaty, threatening more turmoil for the struggling property sector.

TMG is Egypt’s biggest listed property developer.

The court battle over the sale of state land near Cairo for the development threw Egypt’s property sector, a vital source of jobs and investment for the wider economy, into a crisis in 2010 from which it has yet to recover.

The country’s index ended 1 percent lower.

In the UAE, the two bourses ended mixed with Qatar’s market edging up to an 18-day high in muted trade as investors were little encouraged to increase risk during the summer lull.

Dubai’s index fell 0.4 percent, trimming year-to-date gains to 10.7 percent. Emirates NBD fell 1.9 percent and Dubai Islamic Bank shed 0.5 percent.

Second-quarter earnings may trigger some stock-specific buying, but bets are low ahead of the numbers.

“We should have more positive surprises than negative but these will come during summer time, so unless you have something significant, investors will not react,” said Sebastien Henin, portfolio manager at The National Investor. “Liquidity is low with many investors out of the country.”

In Qatar, the index rose 0.07, closing at its highest level since June 20.

Barwa Real Estate and Qatar Gas Transport (Nakilat) rose 2.4 and 2.1 percent respectively.

Elsewhere, Kuwait’s bourse gained 0.2 percent. Political unrest continues to weigh on the market. It’s emir asked outgoing Prime Minister Sheikh Jaber al-Mubarak al-Sabah Thursday to form a new government, state news agency KUNA said, in a move that may ease a political crisis.

 
A version of this article appeared in the print edition of The Daily Star on July 09, 2012, on page 5.

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