JEDDAH/DUBAI: Banks led declines on Gulf Arab markets, which fell slightly on Wednesday after world stocks pulled back from 2009 highs and oil dropped for a second day.
Kuwait’s index took the biggest tumble, falling 1 percent, while Dubai and Oman each lost 0.9 percent as all seven regional benchmarks fell.
Abu Dhabi Commercial Bank led losers in the financial sector, dropping 4.1 percent as more than two dozen regional banks declined, with investors continuing to fret about possible further exposures to bad debts.
“The regional talking point has been the troubled Saad and Algosaibi groups and it is inconceivable there will only be two family companies in difficulties, there must be more and we need to know about them,” said Sanyalaksna Manibhandu, Emaar Saudi Financial Services head of research.
Struggling Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros are restructuring billions of dollars of debts and in June the UAE central bank governor warned UAE banks had “significant” exposure to the two groups, with all Gulf countries affected. “The market has started to slow down and investors are cautious as they await results from the financial sector,” said Ammar Hajeyah, an asset management manager at Global Investment House in Kuwait. “Gulf indexes have broadly declined over the past few days, but robust quarterly results are limiting losses, said Shakeel Sarwar, Sico investment bank head of asset management.
“Although regional earnings have fallen year-on-year, there has been a broad improvement quarter-on-quarter, continuing a trend of rising profitability, with second quarter better than the first quarter and the first quarter an improvement on the fourth quarter of 2008,” said Sarwar.
National Bank of Abu Dhabi, bucked the sector trend, climbing 5.8 percent after it announced plans for a share buy back. Second-quarter profit fell 9.3 percent, with the lender taking provisions worth $136.1 million in the first half of 2009.
Abu Dhabi’s Aldar Properties fell 2.5 percent after second-quarter profit plunged 80 percent.
The Dubai index dropped 0.9 percent to 1,811 points.
The benchmark Qatari index fell 0.6 percent to 6,637 points.
The Abu Dhabi index slipped 0.1 percent to 2,760 points, ending a 10-session winning streak.
The Kuwaiti index dropped 1 percent to 7,637 points.
The Tadawul All-Shares Index (TASI) eased 0.01 percent to 5,778.14 points.
Despite the listing of new insurance companies this week, it has done very little to shift trader sentiment or even improve liquidity, which has actually declined back down to SR4.5 billion on Wednesday, the Jeddah-based Financial Transaction House (FTH) said in its market commentary.
ACE Arabia Cooperative Insurance Co. made its debut at Tadawul with 662.50 percent jump on Wednesday. The SR10 ACE Arabia shares opened at SR91 and reached as high as SR94.75 and low of SR66 before closing at SR76.25. The Egypt index dipped 0.6 percent to 6,106 points.
The Omani index fell 0.9 percent to 5,870 points.
The Bahrain stock index slipped 0.1 percent to 1,497 points.
— With input from agencies
