<b><font size="4"> Writedown, Loss </b></font>
21/04/2009 00:00 AST
Saudi shares tumbled the most in three months, leading declines across the Gulf, after Saudi Basic Industries Corp. announced its first loss since 2001 as the region’s biggest publicly traded company booked writedowns.
Saudi Arabia’s Tadawul All Share Index fell as much as 6.2 percent, the most since Jan. 20, and was down 3.3 percent at 5,048.82 at 2:26 p.m. in Riyadh. Saudi Basic, or Sabic, slumped as much as 9.9 percent, the most allowed in a day, to 42 riyals as the world’s biggest chemical maker by market value posted a first-quarter loss of 974 million riyals ($259.7 million) and booked a goodwill writedown of 1.18 billion riyals.
The world’s largest oil-exporting economy is likely to shrink by 0.2 percent this year, according to Merrill Lynch & Co., as the global financial crisis hurts demand for crude and the plastics and fertilizers produced by Sabic. Crude for May delivery fell as much as 1.5 percent to $45.19 per barrel, adding to the 8.8 percent decline yesterday, on signs a U.S. recession extending into the second half of the year will cut fuel demand. Oil was last up 0.2 percent.
“The markets are adjusting to the first-quarter earnings, Sabic’s results did not meet analyst expectations,” said Faisal Hasan, head of research at Global Investment House KSCC, which was Kuwait’s biggest investment company by market value before shares plunged last year. “International demand is weighing down on oil prices.”
Dubai to Qatar
Stocks in Qatar, the world’s largest exporter of liquefied natural gas, fell the most this month, as the Doha Securities Market 20 Index lost 4.3 percent. Oman’s Muscat Securities Market index slid 4.6 percent, Dubai’s benchmark dropped 0.3 percent.
Dubai, which raised $10 billion in February to help its companies battle the credit crisis, has disbursed “slightly more than half” of the money which will help state-affiliated developers pay contractors’ bills, Nasser Bin Hassan al-Shaikh, director general of the emirate’s Department of Finance said in an interview on DubaiEye radio today.
Abu Dhabi equities declined 2.2 percent led by Abu Dhabi Commercial Bank PJSC. The U.A.E.’s third-biggest bank by assets dropped to its lowest in almost two months, falling 5.4 percent to 1.59 dirhams. Kuwait’s benchmark index lost 0.4 percent while Bahrain’s measure declined 1.3 percent.
Emirates Telecommunications Corp. closed at its lowest since Feb. 26, falling 1.2 percent to 9.98 dirhams. First- quarter profit growth slowed to 3.9 percent from 16 percent in the year-earlier period at the United Arab Emirates’ largest telephone company.
Saudi Telecom Co. fell 1.6 percent to 42.4 riyals after the Arab world’s largest phone company said late yesterday profit dropped 18 percent from a year ago to 2.49 billion riyals.
“Investors are being cautious, given the overnight performance on global markets and the fall in oil price,” said Ali Khan, head of cash-equity trading at Dubai-based investment bank Arqaam Capital Ltd.
Bloomberg
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