Business | Markets
DP World, Asia stocks buoy markets
Kuwait lending guarantee provides extra support
- By Nadia Saleem, Staff Reporter
- Published: 00:00 August 20, 2010
- Image Credit: GN Archive photo
- DP World's share price rose 5.66 per cent to $0.523, outperforming the Dubai index, which rose 0.72 per cent
Dubai : A substantial jump in DP World's shares buoyed UAE stock indices yesterday while most Gulf markets gained from a rally in Asian stocks.
The ports operator on Wednesday announced a 10 per cent rise in first-half net profit, signalling continuing growth in world trade. DP World's share price rose 5.66 per cent to $0.523, outperforming the Dubai index, which rose 0.72 per cent.
It saw 20 million shares traded, also signalling the most interest from investors amid an otherwise slow summer combined with the lull during Ramadan.
Shares in Hong Kong and Shanghai rose yesterday with resources outperforming the broader market as optimism about Chinese demand grew and news of mega-mergers whetted appetite in the sector.
The Bombay Stock Exchange jumped to a 30-month high as slowing food inflation fuelled speculation the monsoon will boost crop output and buoy economic growth.
Banks in Kuwait rose after reports that the government gave a green light to local lenders to finance a 30 billion dinar development plan and is prepared to back them with guarantees.
"With a lack of local catalyst and low volumes, any positive indication from global markets can push the local markets up," said Humam Al Shamaa, economic advisor at Al Fajer Securities in Abu Dhabi. "Investors are influenced by the US, followed by Asian markets."
The Kuwait index advanced 0.4 per cent and and Oman and Qatar rose 0.5 per cent each. Abu Dhabi's index gained 0.4 per cent and Bahrain's measure retreated 0.3 per cent. Saudi Arabia's market was closed for the weekend.
DP World, which is listed on Nasdaq Dubai but whose shares trade on the Dubai Financial Market, saw its share price hit a 15-week high. The company reported a first-half net profit of $206 million on back of increased container volumes across its consolidated 28 terminals.
Chief executive Mohammad Sharaf said the company's dual listing on the London Securities Exchange is still moving forward but it will only be able to make any announcements until after the annual financial results in March 2011.
Ulrich Koegler, vice-president and logistics consultant at Booz and Company, told Gulf News: "Asia and intra-Asia business has taken a very strong turn. It is expected that Asia will become the driver of the global economy for the next two years at least." He said DP World's operations in Asia are "serving the company well".
"Euro-Asian trade lines are strong again, which could be either a temporary peak because of high season or a sustainable trend. We need to wait for the second half to get a clearer picture," Koegler added.
Taking strength from a continuing increase in global trade volumes, DP World's UAE business increased 3 per cent to 5.5 million TEU, or 20-foot equivalent units, but revenues fell 12 per cent. Container storage, mainly for general cargo, has fallen considerably from 2008's peak.
— With inputs from agencies
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