JEDDAH/DUBAI — Dubai and Egypt fell on Monday ahead of a new dual listing on both markets by Orascom Construction and other Gulf stock exchanges were also weak after an oil rally stuttered. Brent crude, which surged at the end of last week, was nearly flat by 1000 GMT when most Gulf markets closed, with an oversupply continuing to weigh on the market despite data showing Japan had pulled out of recession. But crude edged up later in the day after Kuwait's oil minister said lower supply levels would support prices in the second half of the year. Still, the main index on Saudi Arabia's later-closing bourse slipped 0.3 percent to 9,439 points, giving back some of the previous day's 2.3 percent gain. Saudi Electricity Company, which surged its daily 10 percent limit on Sunday, tumbled 7.1 percent and was the main drag on the Kingdom's benchmark. Methanol Chemicals Company fell 2.2 percent after posting a 55 percent drop in fourth-quarter profit and proposing no cash dividend for 2014. Eastern Province Cement tumbled 8.0 percent after proposing a 2.50 riyals cash dividend for 2014, down from 3.50 riyals a year earlier. Dubai's index fell 3.3 percent with most stocks in the red. Emaar Properties, the emirate's largest listed developer, dropped 3.6 percent after posting a 14 percent increase in fourth-quarter profit. The stock surged 4.6 percent ahead of the earnings release on Sunday. Emaar's profit was slightly higher than analyst estimates, but Dubai's retail investors may have hoped for a bigger surprise. Also, according to Naeem Brokerage, Emaar reported off-plan sales of only about 1.0 billion dirhams in the fourth quarter, down from 1.5 billion, 3.0 billion and 6.0 billion in the third, second and first quarters, respectively. "While falling oil prices and a weakening euro could be of a concern for the overall UAE economy, we do not expect any significant impact on Emaar as such," Naeem said in a note. Almost 75 percent of Emaar's revenue this year is expected to come from sectors other than Dubai real estate development, Naeem said, while the company's tourism business is likely to prosper and initial public offers of its hotel unit and Egyptian subsidiary could unlock additional value. Banking sector stocks fell both in Dubai and Abu Dhabi as the latter's main benchmark fell 1.0 percent. Dubai Islamic Bank dropped 2.0 percent and First Gulf Bank lost 1.4 percent. Profit growth at UAE banks is expected to slow to 5-6 percent in 2015 as macroeconomic challenges and the absence of big improvements in asset quality strangle lenders' earnings, Standard & Poor's said on Monday. Another factor that may have prompted Dubai investors to sell stocks and bolster their cash holdings was the upcoming listing of Orascom Construction. The Amsterdam-listed firm has started proceedings for the demerger of the company's units, with its engineering and construction business to be listed on exchanges on Cairo's Egyptian Exchange and Nasdaq Dubai. Egypt's index dropped 2.0 percent as Orascom said it would also sell new shares in Egypt. Institutional investors' book building process will take place between Feb. 19-26, while subscription for retail investors will be between March 1-4. Juhayna Food Industries, one of Egypt's largest dairy product and juice makers, tumbled 4.1 percent after it posted a 48 percent fall in full-year net profit on Monday on higher input prices as well as currency rates. Oman's market, up 0.3 percent, was the only gainer in the region. Telecom operator Omantel added 0.6 percent after keeping its dividend for the second half of 2014 flat despite an 11 percent fall in fourth-quarter profit. — SG/Reuters
