Upbeat start to UAE banks earnings season

Markets Update: Markets hold steady as the first of the UAE's banks reports earnings, with InvestBank reporting an increase in profits and a larger dividend.

The UAE's markets held steady after the first of the Emirates' banks kicked off earnings season for 2011.

Shares in InvestBank, among the Emirates' smallest lenders, rose 6.2 per cent to Dh1.70 each after the bank announced improved profits and an increased dividend.

The Sharjah-based trade finance bank reported net profits for the full year of Dh317.2m, an increase of 5.4 per cent on the same period a year earlier, while the bank's board announced a 10 per cent cash dividend and an 8.2 per cent distribution of bonus shares.

The Dubai Financial Market General Index fell 0.1 per cent to 1,328.77, while the Abu Dhabi Securities Exchange General Index gained 0.2 per cent to 2,337.38.

Union Properties rose for a second consecutive day after it was thrown a lifeline in debt negotiations by Emirates NBD, its largest shareholder.

Yesterday, Union Properties agreed to transfer some of its most high-profile property assets to the bank to settle debts of Dh1.1bn, while extending maturities on a further Dh2.7bn owed.

The developer's stocks rose 6.4 per cent to 28.2 fils each, while Emirates NBD's stocks fell 3.2 per cent to Dh2.70 each, erasing yesterday's gains for the bank's stock after the deal was announced.

Dana Gas and Aldar Properties joined InvestBank to lead gains on the capital's index.

Asian stocks rallied in the early hours of the morning after reports that China's government may move to allow banks to boost lending. The Hang Seng Index gained 1.2 per cent to 19,925.93, while Japan's Nikkei 225 index rose 1 per cent to 8,639.68.

Oil prices moved upwards as US inventories were drawn down by increased gasoline demand. Brent futures rose 33 cents to $110.78 a barrel.