Etisalat continues stellar run as investors award it for special dividends

Abu Dhabi and Dubai stocks kept their winning streak for a fifth session as banking bluechips outperformed and investors taking their cues from expected central bank decisions later this week.

Abu Dhabi Securities Exchange closed 0.7 per cent higher to 5,749 points, with Bank of Sharjah, First Abu Dhabi Bank and Abu Dhabi Islamic Bank gaining. Investors bet that lenders will get a shot in the arm from any hike in interest rates in the US and other countries. The higher rates will contribute to banks' topline as they would be able to charge proportionately more on their debt facilities.

Flying high

But the stock that's the single-biggest boost is Etisalat, which had yet another stellar performance by advancing 1.5 per cent. The stock has rallied for a seventh day running and traded lower only in just a couple of sessions this month. That works to an impressive 24 per cent gain year-to-date.

Various factors combined to support the rally. It vowed to hand out a special dividend of 40 fils per share in addition to 80 fils. The special dividend was afforded by the fact that it managed to increase its full-year profits in a year when companies have struggled to stay profitable. The stock leap was further supported by the board's decision to raise foreign ownership limit to 49 per cent.

Course reversal

Dubai Financial Market pared morning losses to rise 0.1 per cent for the day at 2,621 points, led by blue-chip banking and real estate stocks. Dubai stocks rallied for a fifth straight day getting their boost from a global bullish run and the government's 2040 urban development plan. What also helped are reports about the property market picking up after years of subdued performance.

Acquisition impetus

Saudi Arabia's benchmark index edged up 0.2 per cent led by gains in petrochemical stocks Saudi Kayan, Petro Rabigh and Sabic. The Gulf's largest dairy company Almarai traded 1 per cent higher after agreeing to acquire the bakery firm Bakemart's operations in UAE and Bahrain for an enterprise value of Dh93.5 million.

The transaction was fully funded from its operating cashflow and aims at expanding the company's business into a wider region.

Qatar Exchange closed the day higher by 0.5 per cent to trade at 10,295 points as key banks, Qatar National Bank and Qatar Commercial Bank advanced by 0.5 and 3 per cent, respectively, on hopes that they would gain from central banks' monetary policy guidance.

The same factor also governed the banking stocks elsewhere in the region, which led advances in Kuwait, Oman and Bahrain equity markets.