DUBAI – Gulf stock markets finished near flat in quiet trade Tuesday amid a post-holiday lull in activity. Heavyweight stocks supported Abu Dhabi's index, which ticked up 0.03 percent to close at 2,672 points, a fresh 14-month high. Telecom operator Etisalat and First Gulf Bank gained 0.4 and 1.0 percent respectively. Many investors are bullish on the market, with valuations still considered attractive. “There is some rotation of funds out of Dubai to Abu Dhabi where people are still waiting on results from the real estate firms,” said an Abu Dhabi-based trader. “Valuations in Abu Dhabi are still lower than those of Dubai.” However, shares in Abu Dhabi-listed Dana Gas tumbled Tuesday to their lowest finish since Oct. 4 after sources familiar with the matter said the firm would not repay its sukuk on maturity. Shares in Dana dropped 4.3 percent to 0.43 dirhams, having dipped 8.5 percent intra-day. Dana has reached a standstill agreement with bondholders on its $920 million convertible sukuk maturing Oct. 31, which is effective for up to six months, the sources told Reuters. Dana declined to comment. “This is going to shake the faith of investors (in sukuk) big time,” said a Dubai-based trader, who asked not to be identified. If the payment is not made Wednesday, Dana will become the first UAE company not to repay a sukuk on maturity. The price of Dana's sukuk plunged about 10 points to 68.0 bid. The sources said the standstill would give Dana more time to hammer out a deal with bondholders, and its case is not seen as a negative signal for Dubai credits or markets in general. The privately owned company is not viewed as a strategic entity for the United Arab Emirates. Dubai's index ended 0.02 percent higher to 1,622 points. Total trading volume, at 32 million shares, was the lowest daily count since Sept. 5. Elsewhere, Qatar's benchmark edged up 0.06 percent to 8,521 points, as it resumed trade after a long Eid Al Adha holiday. Qatar Navigation (Milaha) rose 3.9 percent; last Thursday it posted an operating profit of 452 million riyals for the first nine months of the year, up 19 percent year-on-year. In Kuwait, the benchmark eased 0.01 percent to 5,770 points. The index tumbled last week to a two-month low after tens of thousands of people demonstrated against changes to the electoral law. Credit rating agency Fitch said a serious escalation of public unrest could threaten Kuwait's ‘AA' sovereign rating. “Much will depend on how the authorities respond, and whether large-scale violence is avoided,” it said. – SG/Reuters
