MIDEAST STOCKS-Gulf bourses diverge; Saudi real estate shares hit by land tax – Reuters

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* Saudi real estate shares drop after land tax announcement

* But banks outperform on hopes loan demand may rise

* Dubai’s Air Arabia jumps on profit beat

* Blue chips lend support to Abu Dhabi, Qatar

* Telecom Egypt slips despite profit leap

By Celine Aswad

DUBAI, May 9 Shares in the Middle East were
mixed on Monday as some stocks advanced on positive news while
Saudi Arabia’s real estate companies retreated after a land tax
was announced.

Riyadh’s index edged up 0.3 percent in modest
volume. As part of the country’s economic reform campaign, the
Housing Ministry said on Sunday that it was imposing an annual
tax on undeveloped urban land; the levy will be equivalent to
2.5 percent of the value of the land.

The announcement had been expected, and details of how the
tax will be applied – crucial to assessing its impact – have not
yet been revealed. But real estate-related companies with large
land banks were hit by the news, with Taiba Holding
and Jabal Omar Development dropping 2.3 and 1.6
percent respectively.

Banks fared better on hopes that demand for loans to finance
real estate development projects could pick up as a result of
the tax. Banque Saudi Fransi climbed 3.0 percent.

In Dubai, Air Arabia climbed 3.2 percent after the
budget airline reported a 42.2 percent rise in first-quarter net
profit to 111.1 million dirhams ($30.3 million); analysts polled
by Reuters had on average forecast 88.8 million

Shares in Drake & Scull, which has not yet reported
quarterly results, surged 8.6 percent, recovering earlier

But DAMAC Properties dropped 4.1 percent after it
reported a 15 percent fall in first-quarter net profit, as
revenue shrank by a third compared to a year earlier.

With two-thirds of traded shares declining, the main Dubai
index fell 0.3 percent.

Neighbouring Abu Dhabi’s stock index edged up 0.6
percent. Blue chips provided the main support, with Abu Dhabi
Commercial Bank and Etisalat adding 1.3 and
0.8 percent respectively.

Agthia Group rose 1.1 percent after reporting a 14
percent year-on-year rise in first-quarter net profit on a 12
percent increase in net revenue.


Doha’s index broke a five-day losing streak and added
1.3 percent on the back of some buying interest in blue chips.
Islamic bank Masraf Al Rayan and telecommunications
operator Ooredoo rose 1.8 and 4.4 percent.

In Cairo, Telecom Egypt failed to hold onto early
gains and edged down 0.4 percent to 7.97 Egyptian pounds. The
country’s state-owned landline monopoly posted an almost 116
percent jump in first-quarter net profit, citing growth in its
retail business.

“The bottom line was positively impacted by gross margin
improvements, resulting from a change in the revenue mix, solid
contribution from Vodafone Egypt (where it has a 45 percent
stake) and a transactional foreign exchange gain,” said a note
by Cairo’s Naeem Holding, maintaining a “buy” rating on the
stock with a price target of 11.0 pounds.

The main Egyptian stock index rose 1.0 percent.
Orascom Construction added 0.5 percent after it said
it had won two contracts worth 270 million euros ($308 million)
for work on the third phase of Cairo’s third metro rail line.



* The index rose 0.3 percent to 6,694 points.


* The index declined 0.3 percent to 3,316 points.


* The index gained 0.6 percent to 4,476 points.


* The index advanced 1.3 percent to 9,855 points.


* The index added 1.0 percent to 7,646 points.


* The index edged down 0.1 percent to 5,364 points.


* The index rose 0.4 percent to 6,020 points.


* The index dropped 0.5 percent to 1,106 points.

(Editing by Andrew Torchia/Mark Heinrich)

MIDEAST STOCKS-Gulf bourses diverge; Saudi real estate shares hit by land tax – Reuters}