MIDEAST STOCKS-End of Yemen campaign may boost markets – Reuters


DUBAI, April 22 (Reuters) – Saudi Arabia’s decision to end a
campaign of air strikes against Yemen’s Houthi rebels may
support equities in the kingdom and across much of the Middle
East on Wednesday.

Riyadh announced late on Tuesday it was ending a month-long
offensive against the Houthis, who seized large areas of Yemen,
and said it would back a political solution to bring peace to
its war-ravaged neighbour.

The Yemen fighting was never a big concern for financial
markets, which believed the Gulf states could prevent the
conflict from spreading beyond Yemen’s borders; bond yields and
credit default swaps barely moved in response to the violence.

Nevertheless, the fighting did unsettle some investors in
the Gulf and Egypt, and stock markets across the region fell by
several percent after the military campaign began. Its
completion may help to reverse those losses.

Corporate earnings in Saudi Arabia reported since Tuesday’s
close have been mixed. Saudi Electricity Co (SEC), the
Gulf’s largest utility firm, reported its net loss for the first
quarter more than doubled to 1.94 billion riyals ($517.4
million). This was much worse than NCB Capital’s forecast of a
net loss of 1.27 billion riyals.

But telecommunications operator Zain Saudi’s
first-quarter loss narrowed to 257 million riyals from 318
million riyals a year earlier. Two analysts surveyed by Reuters
had forecast Zain Saudi would post losses of 270.1 million
riyals and 289.4 million riyals.

The main Saudi index last closed at 9,559 points; it
faces major technical resistance in the 9,572-9,745 point area,
where the 200-day average roughly coincides with the March peak,
and has been struggling in that area for three days.

Elsewhere in the Gulf, Dubai lender Emirates NBD
may gain after it posted a 60 percent rise in first-quarter net
profit, well ahead of analysts’ forecasts. However, the stock
lacks liquidity, making trade in it choppy.

Property developer DAMAC reported a 38 percent
fall in first-quarter net profit on Wednesday despite surging
revenue, because a year earlier its bottom line had benefited
from a big one-off gain from an associate.

But the company also said it would pay at least 25 percent
of its capital in cash dividends in 2015 and the same ratio in
2016. For 2014, it only offered a bonus share issue.

Retail-focused start-up firm Marka may attract
investors after saying it bought a majority stake in Cheeky
Monkeys, a chain of children’s entertainment and education
centres.

Dubai’s index, supported by a surge in liquidity in
recent days, last closed up 0.7 percent at 4,123 points; it is
approaching majaor resistance on its 200-day average, now at
4,261 points. It has not traded above that level on a sustained
basis since last October.

On global markets, Asia-Pacific equities are mixed on
Wednesday, while Brent oil has edged down 0.4 percent to
$61.64 per barrel.

(Reporting by Olzhas Auyezov; Editing by Andrew Torchia)

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