DUBAI: Gulf markets were little moved Tuesday as retail investors bet on small-cap stocks in thin cues ahead of third-quarter earnings, while Qatar’s bourse fell as news emerged that a state-run energy firm planned to list its unit.
Saudi Arabia’s measure resumed trading after a two-session hiatus due to a national holiday. The index eased 0.3 percent after trading flat most of the session – an indication investors have little direction.
It held above the psychologically important level of 8,000 points and is up 17.7 percent year-to-date, but analysts say it will need strong quarterly earnings to justify breaking above the August intraday peak of 8,223 points.
“We don’t expect to see big surprises in Saudi’s third-quarter results,” said Sleiman Aboulhosn, investment analysts at ING Investments. “Overall, results should be good but I doubt they’ll be good enough to fuel the rally higher, especially with geopolitical threats in the background. We might see some more consolidation over the next few weeks.”
Najran Cement shares rose 2.3 percent after the company said in a bourse statement that it had started commercial production of clinker from its third line.
The main sector of petrochemicals slipped 0.5 percent, and the banking index declined 0.3 percent.
“Pressure on banking sector margins began abating last quarter, but I don’t expect a major improvement until early 2014. We saw evidence of increasing global demand for petrochemicals but it’s unclear whether or not this demand recovery will trickle through 3Q13 results,” Aboulhosn said.
In the United Arab Emirates, small- to mid-cap companies helped Dubai’s bourse climb 0.3 percent and end higher for a third day, near the August peak.
“The market is in a phase where we’re led more by stocks below 1 dirham, which tells me its local high-net-worth individuals who are in speculative investments,” said Mohammad Ali Yasin, managing director of Abu Dhabi Financial Services, wholly owned by National Bank of Abu Dhabi.
Institutional funds await corporate earnings before adjusting, leaving retail investors to dominate, he said.
Earnings season in the United Arab Emirates will begin in late October.
Shares in Dubai’s Gulf Navigation surged 14.8 percent to their highest close since May 2013. The stock rose 10.1 percent Monday after the firm said it planned to sell some ships and might get a cash injection from major shareholders, who it did not name.
The stock accounted for nearly half of all trading on Dubai’s bourse.
Dubai bank Mashreq fell 8 percent, snapping a three-session rally in which it surged 51.7 percent. The lender last week said it would raise its foreign ownership limit to 20 percent. The stock is little traded, with less than 29,000 shares changing hands in the past four sessions.
Abu Dhabi’s benchmark climbed 0.3 percent, extending 2013 gains to 45.5 percent.
In Qatar, the index dropped 1 percent to its lowest close since Sept. 12 as 16 out of 20 stocks declined.