SABIC shares drag Tadawul down

18/03/2015 05:43 AST

Most Gulf stock markets slumped on Tuesday as oil extended its slide, while Egypt stabilized after a profit-taking bout.

Brent crude fell toward $53 per barrel to trade at its lowest level since early February as concerns mounted over a growing supply glut.

The Tadawul All-Share Index dropped 1.4 percent as petrochemicals giant Saudi Basic Industries Corp. (SABIC) slid 4.1 percent to SR87.25 in heavy trade. The stock came under strong selling pressure after falling below SR90; it had traded above that mark since the start of February.

Another major drag was Arab National Bank, which fell 3.1 percent after it no longer carried its SR1.00 dividend for 2014.

PetroRabigh jumped 3.3 percent after saying it signed loans worth around SR19.4 billion ($5.2 billion) for the expansion of its petrochemical complex, nearly two-thirds of the total cost. Technical indicators supported property developer Knowledge Economic City, which surged 4.9 percent in its heaviest trading in three years. It rose above 2014's peak of SR27.80, hitting an all-time intraday high of SR28.30 although it subsequently retreated to end at SR27.20.

Kuwait's wider index ended near-flat, but the blue-chip benchmark fell 0.9 percent after Commerce and Industry Minister Abdulmohsen Al-Madaj said the cabinet was cooperating with the International Monetary Fund to discuss introducing a corporate tax for local companies. He gave no details.

Launching a corporate tax would be a major, politically sensitive policy shift for Kuwait, and for the wealthy Gulf oil exporting nations in general. So far they have relied on oil revenues to mostly avoid direct taxation of corporate profits.

Dubai's bourse was the only Gulf gainer, rebounding after tumbling 5.1 percent over the preceding two days. The index rose 0.4 percent.

Dubai Investments was the main support, jumping 2.2 percent, a day after it revealed plans to float shares in at least one subsidiary next year and said it could divest other holdings. The news was largely ignored in Monday's sell-off, but buying demand returned as market sentiment strengthened.

Builder Arabtec fell 0.4 percent despite Egypt's Housing Ministry saying the two would sign a final contract within 10 days for a $40 billion project to build one million homes across the country.

The two parties differed over the percentage of completed units Arabtec should deliver to Egypt in lieu of payment for land used in the project, a source told Reuters on March 3. But a ministry spokesman said no percentage had been agreed with the company.

Markets in Abu Dhabi and Qatar slipped 0.8 and 0.6 percent respectively.

Egypt's index climbed 0.3 percent after dropping 2.0 percent on profit-taking on Monday. El Sewedy Electric, the largest listed cable maker in the Arab world, was the main support, jumping 8.0 percent ahead of its fourth-quarter earnings. The company's third-quarter profit surged 75 percent.

Reuters