Bank earnings fail to spark early interest in trading

Markets Update: The UAE's markets limp towards the end of the week, with the start of bank earnings season failing to stir traders.

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Local markets got off to a sluggish start in early trading, as the start of earnings season for the UAE's banking sector failed to give local markets a second wind following brisk trading yesterday.

The Dubai Financial Market fell 0.2 per cent to 1,550.05, while Abu Dhabi's index moved was flat at 2,716.47 in early trading.

With Dubai's index having risen 1.35 per cent yesterday, analysts said a correction was in order.

"Yesterday's uptick move was indeed beyond expectations, and now [traders are] getting back to reality," said Talal Touqan, head of research at AlRamz Securities.

One of the biggest movers on the Dubai bourse was Tamweel, which fell 1.32 per cent to 90 fils a share after an early boost. The Islamic lender announced plans yesterday to offer mortgages to international buyers, as the UAE eases its restrictions on visas for property owners.

But few banks saw sharp movements after First Gulf Bank reported an increase in profits of 13 per cent to Dh890 million after markets closed yesterday.

The stock was unmoved at Dh17.75 in early trading despite beating analysts' estimates.

Income from fees was sharply down as new Central Bank regulations to combat excessive personal lending charges took effect, and analysts predicted a tricky year ahead for the lender.

"Since the regulation [has been] in effect since May 1, we should see a more pronounced effect in the next quarter," wrote Naveed Ahmed, a financial analyst at Global Investment House, in a research note.

Other lenders, such as Union National Bank, began the day moving downwards, though the stock has since rallied, rising 0.56 per cent to Dh3.60 a share.

Asian stocks fell as US sovereign debt worries caused concerns for international traders. The Nikkei 225 fell 0.2 per cent to 9,936.12 and the Hang Seng index decreased 0.2 per cent to 21,871.28.