Tadawul: Stocks lose steam in final hour; SABIC ends lower

Tadawul: Stocks lose steam in 
final hour; SABIC ends lower
Updated 04 February 2016

Tadawul: Stocks lose steam in final hour; SABIC ends lower

Tadawul: Stocks lose steam in 
final hour; SABIC ends lower

JEDDAH: Stock markets in the Middle East firmed on Thursday as a second day of stronger oil prices helped to revive risk appetite, although Saudi Arabia’s bourse lost some steam in the final hour of trade as oil gave up some of its gains.
The Saudi Tadawul All-Share Index closed up 0.8 percent at 5,973 points, 83 points below its high. Petrochemical producer Saudi Basic Industries Corp. (SABIC) closed 0.7 percent lower at SR67.25 after Brent crude slipped below $35 a barrel; the stock had traded as high as SR71.
“The Gulf bourses are humming the same tune as oil prices,” said a Riyadh-based equity analyst.
“Although oil prices and regional equities markets have always been strongly correlated, recently the correlation has strengthened.”
Jarir Marketing rose 3.5 percent after the retailer proposed a cash dividend of 1.95 riyals per share for the fourth quarter of 2015, 5 percent higher than the payout in the same period of 2014.
Bank Aljazira advanced 3.1 percent after the lender announced it had booked a capital gain of SR208.6 million ($55.6 million) from selling a plot of land in Jubail.
The gain will be reflected in financials for the first quarter of 2016, it said.
Some traders and fund managers think the Gulf equity markets have now largely factored in economic pain expected this year due to governments’ austerity policies, so investors may continue to bargain-hunt cautiously for stocks with attractive valuations and dividend yields, as long as oil does not fall back sharply.
Dubai’s index rebounded 2.8 percent to a four-week high of 3,058 points in heavy trade, trimming its losses this year to 2.9 percent.
“A close above 3,000 points is sign of an improving technical picture, and leads to a resistance zone at 3,130-3,200 points,” said a note by Kuwait-based KAMCO.
Medium- and long- term investors may begin accumulating stocks at those levels, it added.
Blue-chip developer Emaar Properties jumped 6.1 percent and Damac Properties climbed 4.3 percent. Both companies are expected to report quarterly earnings in coming weeks.
In Abu Dhabi, the index closed up 2.1 percent in heavy trade, cutting its 2016 losses to 3.9 percent. Blue-chip banks helped lift the bourse, with First Gulf Bank and National Bank of Abu Dhabieach trading up more than 3.0 percent.
Dana Gasand National Marine Dredging surged 4.7 and 6.5 percent respectively.
Qatar’s index jumped 2.1 percent in modest trading volume. Ezdan Holding and Industries Qatareach traded up more than 2.5 percent.
But Gulf International Services, the most heavily traded stock, nosedived its daily limit of 10 percent for a second session in a row. The oil driller announced on Wednesday it swung to a net loss of 20.9 million riyals ($5.6 million) in the fourth quarter; QNB Financial Services had forecast a profit of 278.9 million riyals.
Kuwait Food Co. (Americana) jumped 5.3 percent to 2.00 dinars, its highest since Jan. 12, after Gulf-based investment group Adeptio signed an initial agreement with the Al-Khair holding company to buy its 69 percent stake in Americana. Kuwait’s main index rose 1.6 percent.
Cairo’s main index jumped 2.3 percent to 6,202 points as foreign buyers returned. Foreign investors, who had mostly been exiting positions since the start of the year, were net buyers on Thursday, bourse data showed.
Technical analysts at Cairo-based Pharos Research said this could be an opportunity to enter the Egyptian market.
“We think that any break above the 7,100 level — which is the resistance line — would be a confirmation of a bullish rally,” they said in a note to clients.
Commercial International Bank, one of the Egyptian stocks preferred by foreign fund managers, surged 4.9 percent.