Persian Gulf Shares Fall, Led by National Bank of Oman, Emaar

By Zainab Fattah

Aug. 31 (Bloomberg) -- Persian Gulf shares declined on speculation foreign investors are pulling out of regional markets, including Dubai and Oman.

National Bank of Oman Ltd., Oman's second-biggest bank by market value, dropped to its lowest in almost a year. Emaar Properties PJSC fell the most in three weeks. Oman's Muscat Securities Market 30 Index lost 2.3 percent to 9,493.75, its lowest close since Feb. 12. The Dubai Financial Market General Index decreased 0.6 percent, while the Kuwait Stock Exchange Index slipped 0.4 percent, falling for a fifth day.

``Foreign investors have affected emerging markets because they are selling everywhere they can exit to protect their home domain,'' Maha al-Ghunaim, Managing Director at Global Investment House KSCC, said in the telephone interview today. ``Ultimately things can only get brighter since the fundamentals of the Gulf region remain positive.''

Foreign investors were net sellers of 549 million dirhams ($149 million) of securities on the Dubai Financial Market PJSC, in the week ending Aug. 28. Non-citizens of the United Arab Emirates bought 1.11 billion dirhams of stocks on the exchange and sold 1.66 billion dirhams of securities, the exchange said in an e-mailed statement yesterday.

National Bank of Oman slid 3.9 percent to 0.537 rials, its lowest close since Sept. 25. The lender's shares dropped 15 percent this month.

Emaar Drops

Emaar slid 3.4 percent to 9.11 dirhams. The Middle East's largest real-estate developer had its biggest one-day drop since Aug. 11. The stock has lost 39 percent of its value since the start of the year. Zain, the Kuwaiti phone company with operations in 22 Middle Eastern and African countries, retreated 2.3 percent today to 1,720 fils.

The Abu Dhabi Securities Exchange General Index decreased less than 0.1 percent, while the Bahrain All Share Index retreated 0.2 percent.

In Qatar, the Doha Securities Market Index gained 1.4 percent, while Saudi Arabia's Tadawul All Share Index rose for the first time in three days, adding 0.5 percent.

``Valuations in the Gulf are extremely attractive and domestic investors are taking this period of relative calm to build positions,'' Rami Sidani, head of Middle East and North Africa investments at Schroders Investment Management Ltd. in Dubai, said in a telephone interview. ``Also I expect foreign liquidity to start flowing into Saudi Arabia's market.''

Qatar

Qatar's measure trades at 14 times estimated profit, while Dubai's index trades at an average of 11 times estimated earnings, according to Bloomberg data. That compares with a multiple of 15 for the Standard and Poor's 500 Index.

Saudi Arabia's Capital Market Authority on Aug. 20 granted foreign investors indirect access to Saudi stocks by allowing them to buy local shares through Saudi partners. The measure, known as swap agreements, is aimed at transferring the economic benefits of Saudi companies, while the local resident retains legal ownership of the shares.

Samba Financial Group, Saudi Arabia's second-largest bank by market value, gained 1.3 percent to 77 riyals. Industries Qatar jumped 4.5 percent to 168.5 riyals, its biggest gain since April 17.

Hayat Communications Co. advanced 3.5 percent to 445 fils. The construction company that builds telecom infrastructure plans to start a new company in Saudi Arabia with capital of 10 million riyals ($2.67 million), according to a filing to the Kuwaiti bourse today. Hayat will own 50 percent of the new company's stock.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net.