Last of the first-quarter results due out

Dubai Financial Market, the only publicly traded exchange in the region, in addition to Dubai-based investment bank Shuaa Capital will be in focus this week, as both companies report earnings for the first quarter.

DFM Company is expected to report a net income of Dh45 million.
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Investors will be looking for the final first-quarter results to trickle out from the financial services sector in Dubai this week.

DFM Company, the Arab world's only publicly listed bourse, is expected to report its earnings for the quarter following its board meeting today.

Analysts expect the company to report a net income of Dh45 million, down 16 per cent from Dh53.5m in the same period last year. Value traded on the Dubai Financial Market was at Dh10.9 billion for the quarter, down almost two thirds from Dh28.9bn.

"There might be a miss for investors here as social unrest in the Middle East and North Africa region hampered trading activity," said Haissam Arabi, the chief executive at Gulfmena Alternative Investments in Dubai. "Last year, the momentum was driven by a rally in global markets that ended with the emergence of the European debt crisis."

Asas Capital, based in Dubai, said last week it was shifting its investments towards global and other emerging markets as low liquidity continued to plague the country's bourses.

"We've been patient hoping we'd see change in terms of how the exchanges work, but we haven't really seen it. So now we've made a significant shift to focus on other markets," said Robert McKinnon, the chief investment officer at the asset management firm.

"If you can find the same opportunity in a region where you have more transparency and the costs are cheaper, you go there. I can find direct oil exposure in other markets, why not go there?"

Shuaa Capital, the country's largest investment bank, is expected to release its financial statements for the quarter on Tuesday after its board meeting.

Analysts expect Shuaa to report a loss of Dh5.8m for the quarter, from a profit of Dh19.4m in the same period last year.

Also this week, Eshraq Properties's Dh841.5m initial public offering (IPO) subscription is due to close on Tuesday. The share sale is the first from the UAE property sector since 2007.

Abu Dhabi shares held their gains last week, with the Abu Dhabi Securities Exchange General Index closing at 2,697.56 points. The Dubai Financial Market General Index lost 1.6 per cent to 1,607.29 points for the week.

The global backdrop appears to be hampered by negative leads. In the US, initial jobless claims reports are due to be released on Thursday. In the UK, trade balance data is due to be released on Wednesday in addition to the Bank of England's inflation report.

"We are running out of catalysts for local markets, and global equity and commodity markets look like they are correcting," Mr Arabi said. "But we won't see a major drop because the MSCI possible upgrade [of the UAE to "emerging" from "frontier" market] is helping support prices of stocks locally."

In the oil markets, Brent crude for delivery next month was down 73 US cents to $109.85 a barrel in electronic trading on the Intercontinental Exchange on Friday.

Saudi Arabia's benchmark fell yesterday ahead of Saudi Integrated Telecom's 350m Saudi riyals IPO, which is expected to close today. The company was already 42 per cent subscribed on the second day of the share sale. The Saudi Tadawul All-Share Index declined 1.57 per cent to close at 6,577.74.

Elsewhere in the region: Kuwait's measure was unchanged at 6,516.00 for the week; Bahrain's index lost 0.8 per cent to 1,393.17; Oman's benchmark was unchanged at 6,338.80; and Qatar's measure lost 1.1 per cent to 8,452.38.