JEDDAH/DUBAI: Saudi bank shares tumbled Monday following disappointing earnings, weighing on the index, as most Middle East bourses retreated in thin trading as cautious investors awaited further results.
Dubai’s index slipped to a two-week low, Kuwait fell for the first session in three and Egypt, Abu Dhabi, Qatar also declined, with only Bahrain and Oman rising, the latter edging up 0.1 percent to an 11-week high.
Saudi Hollandi Bank fell 3.8 percent after posting its first quarterly loss for two years and Banque Saudi Fransi dropped 3.6 percent after its fourth-quarter profit dropped 43 percent. Both lenders blamed rising provisions for below-forecast earnings. Samba Financial Group also fell as its own profit missed estimates.
The Tadawul All-Shares Index (TASI) dropped 0.4 percent, its second straight decline, after a slightly weak trading session with reduced liquidity level of SR2.8 billion as compared to SR3.1 billion Sunday.
During the initial trading session Monday, TASI lost close to 70 points but managed to trim down its losses toward the end of the day. Seven out of 15 sectors closed with losses with the major losses suffered by the banks and financial services sector losing 1.44 percent. The sector gains ranged from 0.04 percent by the petrochemical industries to 1.04 percent by multi-investment sector.
The overall market breadth also remained negative with only 47 advancers against 65 decliners giving an AD ratio of 0.7231, the Financial Transaction House (FTH) said in its daily market commentary.
Dubai’s Arabtec declined for a second day since agreeing to sell a majority stake to Aabar Investments. The $1.7 billion deal will be through convertible bonds, diluting existing holdings. Arabtec fell 3.4 percent to 2.60 dirhams ($0.71), while Aabar slipped 1.6 percent, having risen 11 percent since Wednesday.
“Buyers with a long-term view continue to mop up Arabtec into weakness and give short term traders an exit,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
Dubai’s index fell 0.6 percent, with Emaar Properties losing 1 percent to reach its lowest finish of 2010.
Kuwait’s Agility climbed 1.6 percent, its second straight gain since saying a US court case had been delayed until late January. Agility is accused of defrauding the US Army and is down 40 percent since charges were brought in mid-November. “There’s no clear explanation from the company about the financial impact of the court case, so investors are very cautious,” said Ammar Hajeyah, assistant vice-president at Global Investment House.
Qatar Real Estate (Alaqaria) rose for a second day since agreeing terms to merge with Barwa Real Estate. According to the deal terms, each Alaqaria share will be exchanged for 1.1 Barwa shares, so the two stocks are adjusting to this ratio. Alaqaria climbed 7.9 percent to 32 riyals ($8.80), while Barwa fell 2.7 percent to 32.20 riyals.