JEDDAH/DUBAI: Institutional buying helped Egypt’s index rise to a 10-week high on Tuesday, but most Middle East bourses fell, tracking losses on global markets as nervous investors sold after a muted start to the earnings season.
The Saudi bourse fell for the first session in four, Dubai’s index slumped to a six-week low and Abu Dhabi also declined.
Regional stocks could rally on Wednesday after Saudi Arabian Basic Industries Corp (SABIC), one of the world’s leading chemical firms and the largest listed company in the Middle East, posted a better-than-expected rise in fourth-quarter profit after market hours.
Egypt rose to its highest finish since Nov. 11, helped up by heavyweight Commercial International Bank (CIB), which rose 3.4 percent. Institutional investors, which tend to focus on bigger firms, are showing interest in CIB as Egyptian stocks play catch-up with world markets, traders said.
The Tadawul All-Shares Index (TASI) dropped 0.6 percent, easing from Monday’s 12-week high as disappointing earnings from Saudi Electricity Co. and Zain Saudi Arabia spurred profit-taking. The pair fell 1.2 and 1.4 percent respectively.
Despite three consecutive days of gains, the market was unable to keep up the momentum and saw a day of losses across the board. All sectors saw losses, which ranged from 0.12 percent in the cement sector to 2.65 percent in the media and publishing sector. Overall market breadth was also negative, with 31 advancers and 87 decliners recording an AD ratio of 0.36, the Financial Transaction House (FTH) said in its daily market commentary.
“A lot of money went in Saudi Arabia last year because international funds were finally able to trade that market, and I think Saudi will continue to attract money, as will Qatar and to some extent Abu Dhabi,” said Richard Frost, head of research sales at Al-Futtaim HC Securities.
This flow may be limited, however, until the global economy shows more convincing signs of recovery, Frost said.
Dubai’s index ended lower for a seventh session in eight, slumping to its lowest close since Dec. 10 as investors cashed in the previous day’s gains. Abu Dhabi slipped to similar milestone, underlining anxiety over corporate earnings.
Commercial Bank of Kuwait made its largest gain for seven months, surging 4.3 percent to recoup the previous day’s losses after its board resigned.
Kuwait’s index rose for the third day in four.