JEDDAH — A leap by the shares of United Arab Emirates telecommunications operator Etisalat boosted Abu Dhabi's stock market sharply on Tuesday, while Saudi Arabia stabilized after six straight trading days of declines. Etisalat said local and foreign institutions and expatriate individuals would be allowed to buy up to 20 percent of its shares, though it did not say when the change would take effect. Currently, only UAE individual investors can buy from the market. This sent the stock rocketing its 15 percent daily limit to 13.80 dirhams, its highest level since July 2008. The rise left the stock with a forward price/earnings ratio of about 12.5 times, more expensive than Saudi Telecom at around 11 but still cheaper than Qatar's Ooredoo at nearly 16. Etisalat pulled Abu Dhabi's stock index up 2.9 percent to 4,756 points; it broke above its March and April peaks and also exceeded its 200-day average for the first time since last November, which was technically very bullish. Shares in rival UAE operator du, listed in Dubai, climbed 4.6 percent in sympathy. But after a strong rise in early trade, the Dubai market pulled back with its main index closing up just 0.2 percent. Dubai was influenced by another wild swing in the shares of Amlak Finance, which surged as much as 12.8 percent in early trade to a new multi-year high. A company executive told the Al Khaleej newspaper this week that the company had been discussing a tie-up with minority shareholder Emaar Properties to develop land. But Amlak, again Dubai's most heavily traded stock, gave up its gains in late trade and closed 3.1 percent lower at 2.50 dirhams. Many institutional investors believe retail investors may have pushed the stock up too fast; some analysts see fair value for the stock below 1.0 dirham. Qatar's index edged down 0.3 percent as Ezdan Holding, which was the most heavily traded stock and had risen sharply in the past two days after its foreign ownership ceiling was raised, fell back 1.7 percent. In Oman, Al Madina Insurance rose 2.3 percent in thin trade after saying it plans to acquire domestic rival Vision Insurance. Financial details were not given. Saudi Arabia's stock index edged up 0.1 percent to 9,280 points, stabilizing after falling for the past six trading days on disappointment at the slow pace of foreign fund inflows into the market. It had dropped on Sunday below its 200-day average, now at 9,414 points, a bearish technical signal. The average now acts as immediate resistance. The market opened to direct foreign investment on June 15 but inflows since then have been minimal, and the latest exchange data showed there was no change to this pattern on Monday. However, blue chips that bore the brunt of the disappointment attracted bargain-hunting on Tuesday. Petrochemical giant Saudi Basic Industries climbed 0.5 percent and property developer Dar Al Arkan added 1.7 percent. Egypt's bourse remained soft. The index slid 0.5 percent, with real estate firm Talaat Mostafa remaining one of the main targets of selling; it fell 2.3 percent. The market's failure to stage a sustained rise after the government suspended a capital gains tax in mid-May has disappointed investors. Major brokerage Pharos Securities issued a report on Monday saying the market appeared to have been forming a peak since September and October 2014, and that there was a sizeable risk of a "significant market decline in the near future". — SG/Reuters
