Dubai’s Emaar Properties edged higher yesterday, shrugging off a 62% decline in fourth-quarter profit, as Middle East markets gave a muted response to the end of Hosni Mubarak’s 30-year rule in Egypt.
“The market has accepted the peaceful transfer of authority in Egypt, but there are worries as to how fast the Egyptian economy can stabilise,” said Youssef Kassantini, a Saudi-based financial analyst.
Dubai’s measure rose 0.4% to 1,604 points. Abu Dhabi’s benchmark climbed 0.6% to 2,728 points.
Saudi Arabia’s index fell 0.1% to 6,627 points.
Kuwait’s index dropped 0.3% to 6,716 points. Oman’s index climbed 0.6% to 6,955 points. Bahrain’s measure rose 0.05% to 1,468 points.
Emaar climbed 0.3% after being up as much as 2.8% intraday. The developer made a quarterly profit of 274mn dirhams ($74.6mn), missing forecasts and down from 720mn dirhams a year earlier after it took 417mn dirhams in impairments and provisions.
“Emaar is priced at a premium to peers, while this is justified, we are cautious given the rising uncertainties,” said Majed Azzam, AlembicHC real estate analyst.
“The best years are over for Emaar and there will probably be deterioration in both the top and bottom line in 2011, driven by margin compression as well as more impairments.”
Emaar’s impairments were likely to have come from mortgage affiliate Amlak and Dubai Bank.
“We remain positive on the medium-term prospects for Emaar particularly as ancillary corporate distractions get resolved,” Chet Riley, Nomura property analyst, wrote in a research note. “We retain our buy rating and would accumulate on weakness.”
Abu Dhabi-listed Dana Gas, which is active in Egypt, rose 4.5%.
Kingdom Holding fell 0.5% after extending a deadline for its offer to buy a 25% stake in telecoms firm Zain Saudi Arabia for a second time.
Zain Saudi climbed 1.3% to a four-week high and rival bidder Bahrain Telecommunications Co rose 0.4%.
Saudi Basic Industries Corp (Sabic) fell 0.7% after oil slumped to a 10-week low on Friday, with petrochemical prices closely tied to crude.
“Mubarak’s fall was already factored in and after recent volatility, the market should move sideways, although oil is weaker and so there could be downside risk in petrochemicals,” said a Riyadh-based trader who asked not to be identified.
Kuwaiti banks were mixed as the index slumped to a 23-week low.
“Liquidity is low and people are waiting for the market to take a direction,” said Jasem al-Zeraei, head of institutional sales at NBK Capital.
He said this was likely to come with the publication of companies’ full annual results.
“The bank sector is getting the bulk of interest and it seems like people are parking their cash there for the time being,” Zeraei added.