A positive earnings outlook sparked a rally in Abu Dhabi banks yesterday, leading stocks higher.
The Abu Dhabi Securities Exchange General Index rose 0.2 per cent to 2,597.08, led by the emirate's biggest banks.
First Gulf Bank advanced 2.8 per cent to Dh16.45 a share, while National Bank of Abu Dhabi gained 1.4 per cent to Dh10.45. Abu Dhabi Commercial Bank rose 0.7 per cent to Dh2.57.
The Dubai Financial Market General Index fell 0.1 per cent to 1,555.41, dragged down by a 4 per cent decline for Dubai Islamic Bank as traders factored in its dividend of 10 fils a share.
First-quarter results "are playing a big role right now due to how they'll be affected by the amount of provisions this year compared to 2010", said Marwan Shurrab, the chief trader at Gulfmena Alternative Investments. "Expectations are for lower provisions due to fewer new issues that would hamper banks' earnings."
Yong Wei Lee, the senior fund manager at Emirates NBD, said investors were in "wait-and-see mode" for earnings. "Liquidity is coming back into the banking system and that tends to be positive for stocks," said Mr Lee.
Movement is on the horizon for Gulf companies. On Wednesday, Qatar National Bank posted a 35 per cent rise in net profit for the first quarter, compared with the same quarter last year, to 1.7 billion rials.
Most of the region's exchanges made modest gains, led by Qatar, which rose 0.8 per cent. The only bourse following Dubai downwards was Bahrain, which slid 0.1 per cent.
