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MENAFN - Khaleej Times - 31/07/2009

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(MENAFN - Khaleej Times) UAE shares capped the week in positive territory, with investors in Dubai focusing on large caps Emaar Properties and Drake & Scull International, or DSI ahead of their second quarter results.

The Dubai Financial Market added 0.4 per cent at 1,818.34, gaining 3.8 per cent from last week's trading. The benchmark index of the Abu Dhabi Securities Exchange rose by 1.5 per cent to 2,800.81, and was 2.9 per cent higher from the previous trading week.

Emaar, the Middle East's biggest property company, rose by 1.11 per cent to Dh2.74. After market hours, the company announced it incurred a net loss of Dh1.285 billion in the second quarter, due largely to a Dh1.727 billion writedown of its US subsidiary, JL Homes. Engineering and contracting company DSI, said its second quarter profit grew by 15 per cent from the previous quarter to Dh90 million, while net profit for the first half stood at Dh168 million. The company did not cite comparative figures.

"In the coming months, DSI will announce many mutually beneficial alliances to further enhance shareholder value," said Khaldoun Tabari, Chief Executive Officer and vice-chairman of the company. Tabari said that DSI's expansion strategy was on track, confirming that annoucements on potential acquisitions across the Middle East should be expected later this year.

Analysts said the markets showed resilience despite oil prices dropping sharply on Wednesday by 3.88 to 63.35 a barrel after figures showed a big rise in US oil stockpiles and falling orders for American manufactured goods. Oil prices were gaining ground in mid-day trading on Thursday and was up 63.80.

"The markets' performance was a surprise and this likely reflects investors have a positive view of the earnings results so far. Some performed better-than-expected, while most results were in line with expectations," said Haissam Arabi, Chief Executive Officer and fund manager at Gulfmena 
Alternative Investments.

With most of the large caps in Dubai already announcing their results, investors will continue to focus more on Abu Dhabi at the start of next week, said Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG Hermes.

"Investors will disseminate Emaar numbers. Any weakness will be a good opportunity for entering the market. Results globally, for the quarter have been solid and can investors can hopefully build on them in the
 second half."

Deyaar was also one of the major gainers in Dubai, as its share rose by 4.1 per cent to Dh0.76. Arabtec Holding, the country's biggest construction company, shed 0.4 per cent to Dh2.73 after posting a 33 per cent drop in its second 
quarter earnings.

Al Mal Capital upgraded Arabtec to an "outperform" with a target
 price of Dh3.38.

"Continually improving balance sheet strength is a positive catalyst. The declining payables days, the thinning gap between outstanding receivables and payables and the reducing inventory levels since the beginning of this year up until now, not only contributes to strengthening the balance sheet but also makes us much more comfortable with the company's ability to constructively manage its cash conversion cycle," said Mala Pancholia, equity research analyst at Al Mal Capital. Banks and property stocks paced gainers in Abu Dhabi. The National Bank of Abu Dhabi, jumped by 8.6 per cent to Dh13.75 after the bank posted better-than-expected quarterly earnings and announced a 10 per cent share buy back plan.

The Union National Bank climbed by 3.6 per cent to Dh3.71, while the National Bank of Ras Al Khaimah, added 2.7 per cent to Dh3.75.

Abu Dhabi property market leader Aldar Properties went up by 2.6 per cent to Dh4.01. Despite an 80 per cent drop in quarterly earnings, Citigroup kept its "buy" rating on Aldar and maintained its target price of Dh8.6. Second-ranked Sorouh Real Estate gained 2.5 per cent at Dh2.90

Rocel Felix


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