Markets Update: Energy giant Taqa slumped to its lowest point in more almost two months as a tax hike on the UK North Sea and foreign exchange losses proved a drag on earnings - with video.
Abu Dhabi's Taqa falls on bourse as results fail to light-up market
Energy giant Taqa fell to its lowest point in almost two months as its first quarter profit almost halved as foreign exchange losses and a tax hike dragged on earnings.
Its first quarter net income dropped 47 per cent to Dh152 million from the year earlier as it racked up a net foreign exchange loss of Dh65m in the first quarter and after changes to the tax regime for the UK North Sea. The company, also known as Abu Dhabi National Energy Company, fell 1.4 per cent to Dh1.38.
Its shares have shed more than 15 per cent in value in just more than 10 days.
Shuaa Capital, the country's biggest investment bank, swung to a loss of Dh26.3m for the first quarter of the year, compared with a net profit of Dh19.5m the year ago period.
The financial services group also announced 39 job cuts and announced a new chairman who will take over from Majid Al Ghurair, who steps down after 11 years in the role.
Shares in the company, of which an investment vehicle linked to Dubai's ruler owns half, were not traded this morning.
On Monday, the company closed 0.88 per cent lower to Dh1.13.
Volumes on UAE bourses have been light as long-term investors take a step back while speculators dominate the market.
"When we see low volumes of around 200 million on [UAE] markets, it's the speculators that are the ones dictating the movement of market in absence of long term investor," said Mohammed Ali Yasin, chief investment officer at CAPM Investment.
He added that with first quarter results now largely behind most traders, speculation on second quarter results had begun.
"It's not going to be worse than the first quarter for most companies, but you have to pick and choose," he said.
Dubai's market added 0.6 per cent to 1,615.78 points and the Abu Dhabi market increased 0.3 per cent to 2,678.44 points.
Investors continued to dump their shares in Islamic mortgage lender Tamweel as the shares hit 10 per cent limit down at the open. It stood at 80.2 fils this morning.
The stock closed limit down Tuesday on resumption of trading after more than two years, when it was worth 99 fils per share.
Engineering and contracting group Drake & Scull International was one of the most actively traded shares in Dubai, ahead of its first quarter results expected to be released later today.