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MIDEAST STOCKS-Emaar IPO plan hits Dubai, Saudi fails test of resistance
October 22, 2017 / 1:34 PM / in a month

MIDEAST STOCKS-Emaar IPO plan hits Dubai, Saudi fails test of resistance

* Emaar says it expects to offer only 20 pct of local unit

* GFH rises on approval for Bahrain unit’s UAE listing

* Saudi index pulls back from 200-day average

* Beaten-down Qatar First Bank leaps in very heavy trade

* Egypt’s Juhayna Food surges on Q3 profit rise

By Andrew Torchia

DUBAI, Oct 22 (Reuters) - Dubai’s leading real estate developer, Emaar Properties, pulled the emirate’s stock index lower on Sunday while Saudi Arabia’s index again retreated from major technical resistance.

The Dubai index lost 0.8 percent to 3,644 points, pulling back from resistance on the August peak of 3,681. Emaar slid 2.1 percent after saying it expected to sell 20 percent of its local property development unit Emaar Development LLC next month in an initial public offer.

Previously, Emaar had said it would offer up to 30 percent of the business, distributing funds raised as dividends to shareholders in the parent company.

It did not reveal on Sunday why the sale was now expected to be only 20 percent, but investors assumed its decision would mean a smaller dividend - and might indicate demand for the IPO was only lukewarm, thanks to a slumping Dubai property market.

Mohammad Kamal, an analyst at Arqaam Capital, said that assuming a net asset value of 23.8 billion dirhams ($6.5 billion) for the unit, investors might receive a special dividend of 0.66 dirham per share, far below the 1.28 dirham which the market had been anticipating.

But he added that Emaar might use 5.5 billion dirhams of debt at the subsidiary level to bolster the special dividend payment. Emaar’s last special dividend based on a unit’s IPO was boosted with outside funds, he said.

Elsewhere in Dubai, GFH Financial climbed 1.8 percent and was Dubai’s most heavily traded stock after the United Arab Emirates securities regulator approved the listing of Bahrain’s Khaleeji Commercial Bank, subject to approval by the Bahrain central bank.

GFH owns 47 percent of Khaleeji, and has long been aiming to list the bank in Dubai. Shares in Dubai’s Shuaa Capital , which owns 14 percent of Khaleeji, were flat; Khaleeji shares fell 1.8 percent in Bahrain in very thin volume.

In Saudi Arabia, the index slipped 0.5 percent to 6,975 points, retreating from resistance on the 200-day average, now at 7,035 points. Bank Albilad fell 1.8 percent after reporting a quarterly profit rise of 9 percent, in line with analysts’ forecasts.

Dairy firm Almarai climbed 0.5 percent, however, after its quarterly net profit of 667 million riyals ($177.9 million), versus 664.3 million a year earlier, beat the 621 million riyal forecast on average by analysts in a Reuters poll.

In Abu Dhabi, the index edged down 0.2 percent but Eshraq Properties rose 1.3 percent after reporting a third-quarter net profit of 685,000 dirhams ($187,000) following a year-earlier loss of 48.5 ‍​million dirhams.

Qatar’s index was down 0.2 percent but Qatar First Bank, which has been trading near its lowest levels since it listed in April 2016, jumped 7.1 percent in its heaviest trade since the listing. It was the market’s most heavily traded stock.

In Egypt, the index barely moved but Juhayna Food Industries surged 7.6 percent after reporting a 12 percent rise in third-quarter consolidated net profit attributable to shareholders. In the first half of the year, its profits had dropped.

HIGHLIGHTS

SAUDI ARABIA

* The index fell 0.5 percent to 6,975 points.

DUBAI

* The index dropped 0.8 percent to 3,644 points.

ABU DHABI

* The index edged down 0.1 percent to 4,499 points.

QATAR

* The index fell 0.2 percent to 8,158 points.

EGYPT

* The index edged up 0.01 percent to 13,715 points.

KUWAIT

* The index rose 0.3 percent to 6,650 points.

BAHRAIN

* The index added 0.4 percent to 1,284 points.

OMAN

* The index dropped 0.4 percent to 5,046 points. (Reporting by Andrew Torchia; Editing by Dale Hudson)

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