JEDDAH/DUBAI: Gulf Arab markets were largely flat on Tuesday, with gains in select key stocks masking a broad regional decline as global equities and oil prices stumbled.
The Dubai measure fell for a second day, while Saudi Arabia lost 1 percent and the Qatar and Oman benchmarks retreated from Monday’s landmark highs.
The Tadawul All-Share Index (TASI) closed at 5,779 points on Tuesday. A strongly negative day as all sectors closed negative, with losses ranging from -0.10 percent in the Insurance sector to -2.34 percent in the Hotel & Tourism sector, with the Petrochemical sector also seeing a -2.03 percent loss Tuesday. Overall market breadth was also negative, with 18 advancers and 101 decliners, registering an AD ratio of 0.18. However accompanying Tuesday’s losses was a weakened liquidity of SR 4.3 billion, the Jeddah-based Financial Transaction House (FTH) said Tuesday.
“It’s all about the correlation with oil prices and international markets,” said Talal Al-Loghani, vice-president for Gulf equity markets at Kuwait Finance and Investment Co.
The Bahrain and Abu Dhabi indexes were the biggest gainers regionally, each rising 0.3 percent, with the latter advancing for the 10th straight session following a 4.3 percent surge by National Bank of Abu Dhabi.
The lender has gained 14.2 percent in the past two sessions and posted a 9.3 percent drop in second-quarter net profit after trading hours on Tuesday.
“The fund managers I speak to know stocks are becoming fully priced, but they don’t want to underperform the market and so continued to buy,” said Sunil Dhall, an independent market analyst.
A global equity surge appeared to be waning, with US shares edging higher overnight and European shares falling after world stocks touched a nine-month high, prompting profit-taking. Gulf markets followed the same trend, with some analysts saying fundamentals have yet to justify the stock price rises.
“It was the continuation of the rally we’ve seen globally, based on US corporate profits being better than expected — profits in the Gulf have been mixed, but the entire world took off,” said Keith Edwards, head of asset management at Doha-based The First Investor. “There has not been any great release of economic indicators to show the global economy is on an upward trajectory, but more a relaxation in the deterioration,” he said.
Saudi Basic Industries Corp. (SABIC) lost 3.5 percent, slipping from Monday’s six-week high as falling oil prices dampened sentiment and convinced traders to book profits. SABIC is closely correlated to oil. Crude slumped to an eight-week closing low on July 14, but subsequently gained 14.9 percent in the nine trading sessions to Monday’s close, with SABIC climbing 13.1 percent over the same period.
Saudi Arabia’s Al-Rajhi Bank dropped 1.1 percent.
Qatar Gas Transport Co. (Nakilat) rose for the fifth session in six, with gains of 16.3 percent since July 20.
Dubai’s index inched down as traders booked profits from Sunday’s surge, its largest one-day gain for more than five months. Trading volume was barely a third of Monday’s total.
