The Tadawul All Share Index (TASI) lost a further 0.8 percent on Monday, taking its losses since the start of the year to 1.8 percent. Oil-derivative producers weighed on market performance as Brent crude futures retreated to around $56 a barrel. Rabigh Refining and Petrochemical fell 2.1 percent.
But Jarir Marketing added 0.2 percent after the electronics and bookstore retailer reported a 3.5 percent increase in fourth-quarter net profit on Monday as sales of electronic goods rose. Net profit came in at SR215.3 million ($57.4 million) in line with the SR203 million forecast by analysts.
Analysts at Al-Rajhi Capital said in a note that the strong revenue growth implies that same store sales growth is the best in seven quarters.
“Jarir’s Q4 revenue growth at 17.7 percent year-on-year was much ahead of our flattish estimate, driven by higher sales of electronics, mainly smartphones according to the company’s announcement. iPhone 7 sales in the Kingdom commenced in Q4 and is likely to have played a major role in driving smartphone sales.”
Egypt’s main stock index corrected on Monday as local traders booked profits and other Gulf markets diverged with United Arab Emirates (UAE) markets outperforming as traders focused on financial shares.
Cairo’s main index fell 0.9 percent, snapping four straight sessions of gains. Local institutions were net sellers of Egyptian shares by a large margin, while foreign funds were net buyers, bourse data showed.
Many analysts believe this is a normal correction, not uncommon after a market has climbed 45 percent since the floatation of the currency on Nov. 3 last year.
Arab Cotton Ginning was the worst performer dropping 4.0 percent. El-Sewedy Electric lost 2.0 percent. On Monday it announced that a subsidiary had won a bid for an engineering and construction project with the state-owned electricity company. The value and start date of the project was not disclosed.
Analysts at Cairo’s Naeem Brokerage believe this project will have little impact on the valuation of El-Sewedy because they have already factored new projects valued at 6 billion Egyptian pounds ($326.5 million) for 2017.
Dubai’s index closed 0.8 percent to 3,721 points in a second session of heavy trade, breaking above technical resistance at the mid-December peak of 3,659 points, facing next resistance at the October 2015 peak of 3,740 points.
The top gainers were smaller companies in finance and insurance; Ajman Bank jumped 7.8 percent.
Some traders have been speculating there may be consolidation in the finance industry following the merger of National Bank of Abu Dhabi (NBAD) and First Gulf Bank, which is set to complete this year.
Shares in NBAD climbed 2.4 percent, helping the Abu Dhabi index finish 0.6 percent higher. Another lender, which traders expect to merge in the coming year, Union National Bank added 2.4 percent.
Qatar’s index, however, lost 0.2 percent as investors cashed out of some of the recent gains. Islamic bank Masraf Al-Rayan fell 1.5 percent.
Technical analysis of the QSE index
This week’s uptick was on lower volumes and that indicates weakness of that up-move. However, we are generally optimistic on the index as positive momentum has been picking up. We maintain our suppor