Saudi index drops amid global weakness, Aldar tumbles in Abu Dhabi

Investors monitor screens displaying stock information at the Abu Dhabi Securities Exchange. (File/Reuters)
Updated 25 August 2019
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Saudi index drops amid global weakness, Aldar tumbles in Abu Dhabi

DUBAI: Most Middle East markets dropped on Sunday amid thin trading volumes, mirroring a tumble in global stocks last week and weighed down by sliding oil prices. 
Brent crude futures fell 58 cents on Friday, or 1%, to settle at $59.34 a barrel, while Wall Street stocks tumbled after President Donald Trump told U.S. companies to look at alternatives to China for manufacturing, following Chinese retaliatory tariffs on American goods. 
The Saudi index was the worst performer, losing 2.4%, dragged down by banks and the petrochemical sector. The rest of the region was also in red territory, except the Egyptian and the Bahraini exchanges, which were little changed. 
"We seem to be getting dragged down by international markets," said a Dubai-based trader. "It’s a quiet day, not the good kind." Islamic lender Alinma Bank was among the worst performers in Saudi Arabia, shedding 4%. 
The bank earlier this month posted a 12% rise in second-quarter net profit. 
In the petchem sector, Saudi Kayan Petrochemical Co was heavily hit, losing 3.9%, while blue chip Saudi Basic Industries Corp (SABIC) lost 2.5%. Arqaam Capital said in a research note on Sunday it expected some weakness in the Saudi stock market this week as global index compiler MSCI completes the second phase of its upgrade of Saudi Arabia to emerging market status. 
"We expect to see circa $6.8 billion of passive inflows into KSA (Saudi Arabia) as part of Phase 2 of EM inclusion, bringing KSA to its full weight," said the Dubai firm. "However, it appears that the KSA index trade is mostly over, as we have already recently seen significant selling pressure, and expect to see weakness into the trade this week."
In the UAE, large property developers were hurt. In Dubai, where the index lost 1.9%, Emaar Properties lost 3.9%, while in Abu Dhabi, where the index shed 1.4%, Aldar Properties tumbled 4.1%. 
Outside of the Gulf, the Egyptian index edged up 0.1%, as a 1.4% drop by Orascom Investment Holding was partly offset by a 3.7% spike in Egyptian Resorts Co, which was the best performer on Sunday and among the stocks seeing the highest trading volume.


Lloyd’s of London profits quadruple on investment gains

Updated 18 September 2019

Lloyd’s of London profits quadruple on investment gains

  • Specialist insurer reports first-half pre-tax profit of $2.87 billion

LONDON: The 330-year old specialist insurance market Lloyd's of London reported a first-half pre-tax profit of 2.3 billion pounds ($2.87 billion) on Thursday, up nearly fourfold on investment gains and a cutback in underperforming business.
Lloyd's, which covers commercial risks from oil risks to footballers' legs, suffered steep losses in 2017 and 2018 due to natural catastrophes such as hurricanes, typhoons and wildfires.
Lloyd's last year told its 99 member syndicates to ditch the worst performing 10% of their businesses.
"It is encouraging that the Lloyd's market is showing increased discipline in 2019," Chief Executive John Neal said in a statement.
"We need to make some brave choices on how to meet the expectations of our customers and all our stakeholders in the future."
The market has proposed its members move to electronic exchanges next year, as it responds to competition from cheaper rivals.
Further details of the strategic changes will be released on Sept 30.
Net investment income rose to 2.3 billion pounds from 0.2 billion a year earlier, helped by strong equity returns.
Gross written premiums rose 1.7% to 19.7 billion pounds but the company's combined ratio, a measure of underwriting performance in which a level below 100% indicates a profit, weakened to 98.8% from 95.5%.
The results compare with a profit of 0.6 billion pounds a year ago.
Premium rates rose by an average of 3.9%, Lloyd's said.
Lloyd's in May asked the Banking Standards Board to conduct a survey of the insurance market's 45,000 participants on issues such as honesty and respect to help to improve its working environment, following allegations of sexual harassment at member firms.
The survey will be published on Sept 24, Neal said on Thursday.