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Shares Slip on Weak Q2 Results

The benchmark index of the Dubai Financial Market inched down by 0.9 per cent to 1,811.00, while the main index of the Abu Dhabi Securities Exchange shed 0.1 per cent at 2,759.63.

Volumes were lacklustre with only Dh554.7 million worth of shares traded in both bourses. Aldar Properties fell by 2.5 per cent to Dh3.94 after posting a hefty 80 per cent drop in quarter earnings. Arabtec Holding, the country’s biggest construction company, edged down by 0.7 per cent to Dh2.74. The company disclosed its results after market hours, and said its second quarter stood at Dh183 million.

Emaar Properties, the Middle East’s biggest property developer, lost by 1.8 per cent to Dh2.71, moving down alongside other large caps ahead of its earnings. Courier company Aramex outperformed the Dubai bourse, rising by 5 per cent to Dh1.66 after posting a 30 per cent increase in quarter earnings. Its net income grew to Dh50 million from Dh38.4 million a year ago.

In Abu Dhabi, National Bank of Abu Dhabi also outperformed the market and jumped by 7.5 per cent to Dh12.95 even as its posted a 9.3 per cent drop in second quarter earnings. Al Mal Capital kepts its long-term “outperform” rating of the bank, but said its second half income will come under pressure from the expected rise in its non-peforming loans. “Investors do not want to hold positions, especially with the dismal earnings results of some of the big companies. The first quarter rally was spurred by positive numbers, but the second quarter figures raises doubts about prospects for economic recovery for the remainder of the year,” said Vyas Jayabhanu, head of investments at Al Dhafra Financial Brokerage in 
Abu Dhabi.Helping weaken sentiment is dour economic data that showed US consumers were less confident about their jobs and the economy, sending equities and oil prices lower. The benchmark crude for September delivery fell by $11.5 to $67.23 a barrel at the New York Mercantile Exchange.

“By the end of this week we will have a good idea of how earnings look in the UAE and whether third quarter guidance prompts further buying at these levels. Results so far had very few shockers, and this certainly underpins the market at these levels,” said Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG-Hermes.Government-run oil and gas producer Abu Dhabi National Energy Co. or Taqa, slipped by 0.7 per cent to Dh1.53. The company said on Wednesday it bought the energy business of the Netherlands-based Royal DSM NV for 285 million euros or $404 million. Taqa Energy BV will acquire the non-operated interests in the pipeline company Noordgastransport BV, three other pipelines, and 20 producing oil and gas fields in the Dutch North Sea. — rocel@khaleejtimes.com