Gulf markets edge down as oil drops; Saudi banks strong

13/01/2015 08:35 AST

Gulf stock markets ran out of steam yesterday after several strong sessions as oil prices fell by more than $1 a barrel, although positive fourth-quarter corporate earnings supported individual stocks.

Saudi Arabia’s stock index slipped 0.1% as shares in petrochemicals giant Saudi Basic Industries fell 1.9%; petrochemical industry earnings are under major pressure from weak oil prices.

However Saudi banks, boosted by generally positive financial results, offset most of petrochemicals’ losses yesterday.

Saudi Hollandi Bank jumped 2.0% after it beat analysts’ expectations with a 33% rise in fourth-quarter net profit. The lender made 461.9mn riyals ($123.1mn) in the three months to December 31; analysts surveyed by Reuters had forecast it would post, on average, a net profit of 433mn riyals.

Banque Saudi Fransi added 1.0% after posting a 211% rise in fourth-quarter net profit, also ahead of analyst forecasts.

Dubai’s index edged down 0.7% after rising as much as 1.9% early in the session. Most stocks declined and real estate developer DAMAC, which had earlier in the day surged 21% from the last finish of its London-listed shares as it listed in Dubai, closed 1.8% higher.

“You cannot have a clear trend in the current environment,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi. “The key point is oil prices. As long as investors don’t think that we have reached the bottom on oil, the market will be trendless.” Abu Dhabi’s bourse also edged down 0.7%.

Oman’s benchmark rose 0.6%. Investment firm Al Anwar Holding, up 4.0%, was the top gainer after saying late on Sunday that its profit in the three months to December 31 had more than doubled to 3.7mn rials ($9.7mn).

Egypt’s bourse jumped 2.2% in a broad rally. GB Auto, the country’s biggest listed vehicle assembler and distributor, surged its daily 10% limit. The firm’s chief executive told Reuters last week that it was working on a rights issue and planned to invest $1.5bn to build two new factories.

Yesterday, the firm said the rights issue would be worth 960mn Egyptian pounds ($134mn). Elsewhere in the Gulf, Kuwait’s index slipped 0.03% to 6,561 points, while Bahrain’s index added 0.3% 1,430 points.

Reuters