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Abu Dhabi, Dubai stocks flatline, but banking stocks take a dive

Abu Dhabi and Dubai stocks were flatlining in early Tuesday trades with banking and real estate pulling indexes in opposite directions, while first-quarter earnings disappointed in other Gulf markets.

Abu Dhabi Securities Exchange traded nearly unchanged at 6,093 points, taking a breather from an impressive run of gains that saw the index trade higher in 12 of the last 13 days. Advances in real estate were done away by a pullback in the financial pack.

Ex-dividend factor

Abu Dhabi Islamic Bank plunged 4.5 per cent, marking the biggest-single drag on the index as the stock was trading with no dividend entitlements for those buying it on Tuesday. It lost 22 fils of its value on the ex-dividend day, with the lost value roughly matching the around 21 fils it earlier announced as dividend payout for 2020.

Aldar Properties gained after it reported its second phase of the Noya community on Yas Island sold out within 48 hours, demonstrating continued demand for quality homes in Abu Dhabi. Just over 60 per cent of these units were purchased by UAE nationals, helping it generate over Dh1 billion in sales.

Property moves on

Real estate and banking stocks moved sideways in Dubai as well, where the index flatlined at 2,586 points. Damac, Emaar Development and Emaar Properties advanced as investors have high hopes about their first-quarter results after Emaar's managing director announced a more than two-fold increase in topline numbers, without elaborating on how much of it translated on the bottom-line.

Ajman Bank, Dubai Islamic Bank and Amlak Finance slipped ahead of their quarterly results as investors traded risk-off with no insights available from the sector on how it performed in the first three months of the year.

Results disappoint

Qatari lenders followed the lead set by their UAE counterparts, weighing down the index by 0.3 per cent at 10,469 points after the first-quarter earnings from two banks fell short of pleasing the markets. Qatar National Bank dropped after reporting lower profits and Qatar Islamic Bank sagged as its numbers were not high enough to impress investors.

Oman's 30-company index was unchanged at 3,726 points with its biggest lender, Bank Muscat, shedding 0.5 per cent. Sembcorp Salalah sank 3.7 per cent after quarterly profits dropped to OR3.9 million from OR5.1 million for the corresponding period a year earlier.

“The Abu Dhabi Securities Exchange Index was hit today by the financial sector’s performance, leading to a drop of almost 0.2 per cent. Abu Dhabi Islamic Bank lost more than 4% after postponing one-month loan installments with no charges, which will weigh on cashflow, and investing in IBM’s hybrid cloud solution.”

Wael Makarem, Market Analyst at ICM.com