World Economy

Arab Stocks Worst in 10 Years

Arab Stocks Worst in 10 YearsArab Stocks Worst in 10 Years

Persian Gulf Arab equities trimmed their worst January in at least a decade after oil capped its second weekly advance.

Dubai’s DFM General Index led gains in the region, climbing to the highest in more than three weeks as the number of shares traded was almost double the six-month average. Abu Dhabi’s ADX General Index had the biggest increase in more than a year. Saudi Arabia’s Tadawul All Share Index rose a fourth day, the longest streak since November, Bloomberg reported.

“We were sitting on the sidelines for most of January,” said Muhammad Shabbir, the Dubai-based head of equities and funds at Rasmala Investment Bank Ltd. “We’re looking to enter the market again this week after the losses we’ve seen this month. February could well shape up as a positive month.”

Equities across emerging markets rallied last week as risk appetite strengthened on bets the Federal Reserve will refrain from raising interest rates soon and as oil jumped on speculation an output cut may be on the way. Governments in the six-nation (Persian) Gulf Cooperation Council (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman), depend on energy revenue to fund spending.

Brent crude for March settlement, which expired last week, rose 2.5% to $34.74 a barrel on the London-based ICE Futures Europe exchange on Friday. The more-active April contract increased to $35.99.

Worst January

The Bloomberg (P)GCC 200 Index, a gauge of 200 of the region’s biggest companies, added 2.1%, gaining for a third day. The measure has lost 9.2% this month, the worst start to a year since the index was created 10 years ago.

Abu Dhabi’s ADX General Index advanced 3.7%. First Gulf Bank PJSC was the biggest contributor to gains with a 12.4% jump, the most since May 2005. A shareholder in the UAE’s third-largest lender canceled a share sale valued at about 1.2 billion dirhams ($327 million), according to people familiar with the matter, after the transaction had already been priced and allocated to investors.

Dana Gas PJSC reported a temporary interruption in gas flow in Iraq at the end of last week, the company said in a statement to the Abu Dhabi stock market. The shares dropped 2.3%.

Bullish Dubai

Emirates National Bank of Dubai PJSC, country’s biggest lender, led the emirate’s benchmark index as just 211,000 shares were exchanged. The bank’s weight on the gauge was increased this month as part of a regular index review.

Dubai stocks’ moving average convergence and divergence indicator, known as MACD and used to indicate changes in a direction or trend, has risen through a “signal” line since Jan. 27, a bullish indicator to many technical analysts.

Saudi Assets

Saudi Arabia’s benchmark added 2%, taking its four-day gain to 6.9%. Saudi Basic Industries Corp., one of the world’s biggest petrochemicals companies, rose 3% to the highest in almost three weeks. National Commercial Bank, the country’s largest lender, jumped 5.4%. Al Rajhi Bank rose 3.1%.

The kingdom’s net foreign assets shrunk by about 3% in December to more than $608 billion, bringing the drop in 2015 to $115 billion, according to central bank data released on Thursday.

Oman’s MSM 30 Index added 3.3%, the most since Dec. 22. Bahrain’s BB All Share Index rose 1.3%, also the most since December, and Qatar’s QE Index advanced 2.3% to the highest in nearly three weeks.

Kuwait’s SE Price Index increased 2.1%, the biggest jump in more than a year. Kuwait Finance House rose 5.3% after the company’s fourth-quarter profit climbed 10% and the board recommended a 17-fil cash dividend for 2015 and one bonus share for every 10 held. The stock’s three-day gain is the biggest since 2009.

Egypt Volatility

Egypt’s EGX 30 Index rose 0.1%, extending its winning streak to five days, the longest in more than a month. That pares the gauge’s decline to 14% this month. The measure’s 30-day volatility reading is near the highest since July 2013.

Emaar Misr for Development SAE, the country’s second-biggest real estate developer, dropped 0.9%. Commercial International Bank Egypt SAE’s 1% increase was the biggest contributor to the EGX 30’s gains. It accounts for about 31% of the gauge.