Emaar drags Dubai down while Aabar leads slide in Abu Dhabi

Dubai: Shares of Emaar Properties declined, pulling Dubai's main index to close lower for the fourth straight session as investors expect the firm to post weak profit growth.

Emaar lost 1.42 per cent, pulling the index down 0.79 per cent to 5,384.77 points.

"Emaar is leading the decline as expectations for the second-quarter profit are not very positive because of its subsidiary in America that could still be hit by the subprime mortgage crisis," said Chahir Hosni, sales manager at EFG-Hermes.

Emaar's second-quarter net profit is expected to grow by an average of 13.5 per cent to 1.77 billion, according to a Reuters survey of analysts last month.

Amlak gained 2.65 per cent after jumping almost 5 per cent earlier after revising up its 2008 profit outlook as it posted a record profit in the second quarter.

"The gains today [on Monday] were mainly driven by Amlak's earnings, but the market is coming off because the market is waiting for results of big names like Emaar," said Hossam Al Gandi, a trader at EFG-Hermes.

In Abu Dhabi, shares of Aabar Petroleum declined as much as 9.96 per cent in the session after rallying more than 33 per cent this month. It had soared 9.3 per cent on Sunday.

Bond

The firm's board was set to consider on Monday issuing a convertible bond to an Abu Dhabi-based strategic investor.

"There is profit-taking today [on Monday] because we saw heavy retail buying in Aabar on rumours, and nothing has come of them yet," said Al Gandi. The benchmark declined 0.9 per cent to 5,042.03 points.

The main Saudi index extended gains into a second day, helped by banking stocks that have gained after Riyad Bank posted a 6.8 per cent rise in second-quarter profit on Sunday.

Shares of Banque Saudi Fransi surged 5.63 per cent after the lender said it plans to raise its paid-up capital by 60 per cent to 9 billion riyals ($2.40 billion) through rights and bonus share issues.

"Riyad Bank's profit surge indicates other banks will do well," said Abdullah Al Aqil, trader at Samba Financial. "Saudi Fransi's plan to raise capital is positive because it shows the bank is moving towards more expansion and this is encouraging investors to accumulate its shares on expectations of higher profit in the future."

The benchmark, the worst-performer in the Gulf Arab region this year, climbed 0.36 per cent to 9,517.32 points.

In Oman, Shares of Oman Telecommunications Co (Omantel) ended up more than 2 per cent after the government invited investor interest in the planned sale of a 25 per cent stake in the firm.

The stock, up more than 36 per cent this year, gained 2.44 per cent.

"Omantel is gaining on the news that the government has invited strategic investors to buy a 25 per cent stake in it," said Adel Nasr at United Securities brokerage.