Etisalat, banks lead gains on Abu Dhabi markets, as investors factor in Q1-21 numbers
After dropping in recent days, Dubai real estate stocks see some positives
Etisalat drove the upsurge in Abu Dhabi stocks in early Thursday trades, with the telco wowing investors with its Dh2 billion plus net profit for first three months of 2021. In Dubai, real estate stocks reversed recent losses.
Abu Dhabi Securities Exchange traded 0.1 per cent higher at 6,088 points, with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank and Sharjah Islamic Bank benefitting from upbeat sector results. But the index received its biggest boost from Etisalat.
It gained as much as 1.2 per cent at one point, but has since shed some of the momentum and is now up 0.2 per cent.
The telco late on Wednesday reported an 8 per cent uptick in first-quarter bottom-line to Dh2.3 billion, mainly on the back of lower impairment losses of trade receivables and contract assets coupled with better contributions from associate companies. Profits were, however, squeezed a bit as operating expenses increased 4 per cent to Dh8.4 billion.
Sustainable
The numbers build on Etisalat's performance last year when it posted impressive growth despite challenging operating conditions. The 2020 performance had resulted in additional dividends, which combined with a foreign ownership limit hike, triggered a stock rally that continues, leading to a whopping 27 per cent gain for the year.
Dubai Financial Market was up 0.3 per cent at 2,627 points with real estate stocks leading, as investors pin their hopes that developers will report outstanding first-quarter numbers going by the signals received by a couple of blue-chips.
Up on divestiture
The healthcare firm Amanat Holding jumped 2.4 per cent after divesting 21.7 per cent stake in Taaleem, resulting in a total cash return of Dh225 million. The transaction comes in line with strategic objectives to focus on controlling stakes. The move might go a long way in turning around the business after its 2020 profits plunged 86 per cent.
Holding the index back was Aramex, Shuaa Capital and Takaful House, which encountered intense selling as the stocks were trading on their ex-dividend date.
"Saudi National Bank’s earnings surprised on the upside with a 20% rise in Q1-21 profit. SNB profits were led by increased operational leverage, but also by a release of loss provisions.
"Saudi National Bank, formed recently by merging National Commercial Bank and Samba Financial Group, is up 33.5% year-to-date, while technical indicators support a continuous bullish momentum as the price closed at all-time high of SR57.90 on Wednesday.
"Saudi banks are well positioned to capitalize on the regional as well as global economic recovery as increased demand is expected to push oil prices higher. S&P Global Ratings has assessed Saudi banks to surpass GCC peers in 2021 in terms of profitability."
“Saudi banks are also getting a boost from the Crown Prince’s ambitious plan to re-vitalize and diversify the Kingdom’s economy from exporting oil to other industries and sectors, such as tourism as well as renewable energy and pharmaceuticals…”
Results weigh in
Qatar Exchange dropped 0.1 per cent at 10,929 poins. The telco Ooredoo headed lower after first-quarter profits halved, while Mazaya Real Estate Development retreated after failing to improve its bottom-line.