June 11, 2017 / 1:49 PM / a month ago

MIDEAST STOCKS-Qatari banks fall after UAE red flag; UAE's Dana Gas, DSI rise

5 Min Read

* All banks except Commercial Bank down in Doha

* Market down 8.7 percent since four Arab states cut links

* Dana Gas soars on hopes for better cash flow

* DSI's major shareholder sells shares to strategic investor

* Riyadh down as weak oil prices hurt petchems

By Celine Aswad

DUBAI, June 11 (Reuters) - Shares in Qatari banks fell on Sunday after the United Arab Emirates central bank ordered UAE banks to be wary of accounts which they hold with six Doha-based lenders, while Dana Gas and Drake & Scull outperformed in the UAE.

As the diplomatic crisis in the region continued, the UAE told its banks to stop dealing with 59 individuals and 12 entities with alleged links to Qatar, and advised its banks to conduct "enhanced due diligence" towards the six Qatari lenders.

Five of the six are listed on the market: Qatar National Bank, Qatar Islamic Bank, Qatar International Islamic Bank, Masraf Al Rayan and Doha Bank. All of them fell on Sunday with Islamic lender Masraf Al Rayan, the biggest loser, down 4.0 percent.

Qatari banks have about 60 billion riyals ($16.5 billion) of funding in the form of customer and interbank deposits from other Gulf states, SICO Bahrain estimated; most of this could eventually pull out if the crisis continues. Commercial Bank of of Qatar was the only lender to rise on Sunday, gaining 2.7 percent.

Barwa Real Estate dropped 4.1 percent and the Qatari stock index fell 1.9 percent. Last week, it shed 7.1 percent because of the crisis.

Meanwhile, the Riyadh index lost 0.8 percent in low volumes, weighed down by the petrochemical sector as the Brent oil price stayed near a one-month low. Ethylene maker National Petrochemical lost 3.5 percent to close at its lowest price since November.

Shares of companies that might benefit from index compiler MSCI upgrading Riyadh to emerging market status were relatively resilient; dairy producer Almarai rose 0.9 percent to 82.90 riyals, a fresh all-time high. MSCI will announce on June 20 whether it is putting Saudi Arabia on review for a possible upgrade.

In Egypt, the index fell 0.5 percent, easing from an all-time high as some investors booked profits. The largest listed lender, Commercial International Bank, lost 1.1 percent.

Dana Gas, Drake & Scull

In Abu Dhabi, Dana Gas soared 13.2 percent and was the most heavily traded stock. It has rocketed 46 percent this month on news that it has received a portion of its overdue payments from Egypt and on hopes for its legal efforts to recover money from Iraqi Kurdistan.

A 0.9 percent rise by shares in the second largest bank in the region by assets after QNB, First Abu Dhabi Bank, also carried the Abu Dhabi index 0.5 percent higher.

In Dubai, builder Drake & Scull rose 1.2 percent to 0.422 dirham; it has risen 5.5 percent since Thursday in unusually large volumes.

Former chief executive Khaldoun Tabari has sold his stake in the company to Tabarak Investment, a source told Zawya, a Thomson Reuters publication.

Tabarak Investment's stake stands at around 18 to 20 percent after the sale, making it the largest shareholder, Zawya said. In April, DSI said it would sell 500 million dirhams ($136 million) of shares to Tabarak as part of its capital restructuring programme, subject to regulatory approval.

The company's business environment still looks tough, according to analysts.

"Project tendering seems to be muted in 2017, we do not expect any foreseeable significant operational improvements. Overrun costs and doubtful receivables continue to be DSI's biggest obstacles leading to DSI potentially posting some 250 million dirhams additional losses by the end of this year," a note by Al Ramz Capital said last week.

The Dubai stock index fell 0.4 percent as 12 shares rose but 18 declined including builder Arabtec, down 1.6 percent.

Highlights

Saudi Arabia

* The index lost 0.8 percent to 6,809 points.

Dubai

* The index fell 0.4 percent to 3,388 points.

Abu Dhabi

* The index added 0.5 percent to 4,499 points.

Qatar

* The index lost 1.9 percent to 9,060 points.

Egypt

* The index fell 0.5 percent to 13,616 points.

Kuwait

* The index dropped 0.4 percent to 6,755 points.

Bahrain

* The index was flat at 1,323 points.

Oman

* The index lost 0.4 percent to 5,331 points. (Editing by Andrew Torchia and David Evans)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below