Dubai

Saudi’s Tadawul index barely moved despite a $19 billion stimulus package, indicating the underlying nervousness among traders.

Saudi Arabia was planning to inject $19 billion in housing and small industries as it seeks to create jobs in an economy battered by falling crude oil prices. The impact, however, was not seen on the local bourse and the related companies.

The Tadawul index was 0.23 per cent lower at 7,077.60, after moving in the tight range 7,068.81-7,116.17.

“The stimulus package in Saudi Arabia is a definite positive as it creates a multiplier effect on the economy. However, we think investors are taking time to digest the several announcements coming in,” Vrajesh Bhandari, portfolio manager Mena equities with Al Mal Capital.

“Still, several variables need to play out — roll-out of VAT, further Saudization policies, levies on expats and all these factors are making fund managers cautious about the market,” Bhandari said.

Traders will also eye on the next week’s budget for details.

Energy shares gained more than 1 per cent due to rising oil prices, while others belonging to transportation, services fell a tad.

Dividend alternatives

Traders were seen selling Emaar Properties, which announced lower than expected dividend, and bought alternative dividend yielding stocks like Dubai Islamic Bank.

Emaar Properties extended losses for another session, and the share price fell below the keenly watched Dh7. Emaar Properties closed 3.74 per cent lower at Dh6.95. The Dubai Financial Market General Index closed 1.4 per cent lower at 3,355.40.

“There are too many negative factors in Emaar. Investors would had been sitting on higher allocations in Emaar looking at higher dividend, but now as the news has come, some people are offloading their Emaar shares,” said an analyst who wished not to be named.

Analysts say that there has been a churn of stocks happening in the market, and attraction were the dividend yielding names like Dubai Islamic Bank, which closed 0.16 per cent higher at Dh6.15.

“On Emaar, many retail investors feel short changed and they are overreacting. Also quite possible that, foreign investors are cutting losses and may even be adding short positions. Bargain hunters may emerge once the stock price stabilises at a certain level,” Bhandari said.

Amanat closed higher, extending gains for another session. Amanat closed at Dh2.29, up 1.34 per cent.

The Abu Dhabi Securities Exchange general index closed more than 1 per cent lower at 4,339.22.

“The general level of pessimism is also affecting the Abu Dhabi market, driven lower by heavyweights FAB and Etisalat,” said Bhandari. Adnoc Distribution closed steady at Dh2.64.

“ADNOC distribution is holding up relatively well, given the stable dividend yield and also likely some support from Abu Dhabi based institutional investors,” he added.

Elsewhere in the Gulf, the Qatar exchange index closed 0.06 per cent higher at 8,211.94.