Gulf bourses fall as oil rebound slows

08/09/2016 05:44 AST

Stock markets in the Gulf declined yesterday as some investors stayed away ahead of market closures next week for Eid al-Adha holidays, and after recent gains in oil prices faded. Riyadh’s main index retreated 0.8% in the lowest trading volume this year as investors sold shares indiscriminately, with losers outnumbering gainers 111 to 34.

The petrochemical sub-index fell 0.7% with Saudi Basic Industries dropping 1.2%. Brent crude oil, which hit a one-week high of $49.40 a barrel on Monday after Russia and Saudi Arabia agreed to cooperate on stabilising the oil market, has dropped back to $47.18. A lack of liquidity in the stock market has plagued trade in the last several weeks, and many portfolio managers believe this will remain the case at least until third-quarter corporate earnings are published next month.

“Investors are trying to look for fundamental justifications to buy but there really aren’t any at the moment, and so many of them will stay away until September ends,” one Jeddah-based asset manager said.

Emaar the Economic City rose 2.2% after it said an affiliate had obtained a 2.7bn riyal ($720mn) Islamic loan from banks to finance the second phase of building King Abdullah Port. Amana Cooperative Insurance climbed 0.6% after the board recommended a 56.3% share capital reduction through a reverse stock split of 1.125 shares for every two shares held. Dubai’s index pulled back 0.7% with investors booking profits in small caps.

Drake & Scull dropped 1.7%. But Gulf Navigation added 1.7% after the company said it had signed a new settlement agreement in its long debt dispute with Nordic American Tankers and that its debt to Nordic American had now been settled fully. It gave no details.

Abu Dhabi’s index edged down 0.2% as the most valuable company, Etisalat, dropped 0.8%. But in Kuwait, the telecommunications and banking sectors lifted the main price index by 0.3%.

Mobile operator Zain climbed 3.1% and Boubyan Bank rose 1.3%. Cairo’s main stock index fell 0.7% in the lowest daily volume for six weeks. Orascom Telecom, a stock favoured by local investors, declined 1.8% but Palm Hills Development, the most heavily traded share on the market, rose 0.4%.

Elsewhere in the Gulf, Oman’s index added 0.2% to 5,783 points, while Bahrain index was flat at 1,128 points.

Gulf Times