Abu Dhabi banks lift index ahead of earnings

Reuters

DUBAI: Abu Dhabi lenders help boost the market as investors buy on expectations of strong year-end results and dividend payouts, while Dubai’s bourse is choppy.

Shares in National Bank of Abu Dhabi NBAD rise 1.7 per cent and First Gulf Bank climbs 1.8 per cent.

“It’s the typical earnings and dividend play for banks -they are expected to post good numbers,” says Hisham Khairy, head of trading for institutional desk at MENA Corporation

Analysts polled by Reuters expect National Bank of Abu Dhabi to post a 1.7 per cent decrease in fourth-quarter profit but see First Gulf Bank’s profit up 1.7 per cent. Small-cap Sharjah Islamic Bank jumps 6.3 per cent.

Abu Dhabi’s index .ADI climbs 0.9 per cent to 4,436 points, heading for its third gain in last five sessions.

Renewed buying in UAE markets comes near the end of the week as investors open fresh accounts under new margin lending regulations.

Dubai’s measure DFM gains 0.3 per cent to 3,456 points, heading for its second gain in last five sessions. The index is still below on Sunday’s intraday peak of 3,515 points -also the highest intraday level in more than five years.

Earlier in the week, changes to the margin lending rules and threat of fines for brokerage firms not complying triggered firms to ask clients to cut their leverage.

“Investors needed to open new accounts for margin trading and transfer money from previous accounts to trade again -hence we’re seeing a pick-up in the market,” says Khairy.

Elsewhere, Qatar’s benchmark .QSI adds 0.3 per cent to 10,869 points and Oman’s measure .MSI rises 0.9 per cent to 7,148 points.

Saudi Arabia’s Riyad Bank 1010.SE may gain on Thursday after posting estimate-beating quarterly earnings jump of 27.2 per cent, which could help boost sentiment in the sector where most big banks have been posting little growth in profit.

The bank said in a bourse filing it made 1.03 billion riyals ($274.6 million) in the fourth quarter while analysts polled by Reuters had expected an average net profit of 954.3 million riyals.

Riyad Bank said the profit jump was due to increased income and a drop in expenses, without elaborating further.

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