Saudi stocks climb, up beat on earnings

31/03/2011 00:00 AST

Saudi Arabia’s index edged higher, rising for the fifth day in seven on upbeat expectations for first quarter earnings but gains may be limited. The benchmark rose 0.67 percent to close at 6,562.85 points Wednesday, up 10.5 percent in March.

"For short-term technical indicators, we do show a diversion on the volume indicator, which indicates high possibility of market correction down to 6,380," said Youssef Kassantini, a Saudi-based financial analyst. "Overall, we do expect a pull back for the next seven to 10 days."

Market mover Saudi Basic Industries Corp (SABIC) jumped 2.4 percent and large cap stocks Saudi Telecom Co and Saudi Electric added 0.5 and 0.7 percent respectively.

"Q1 earnings will be excellent for the petrochemical sector. Also, we expect a bit of encouragement in the banking sector. These two sectors should pull the market forward for Q1, going into Q2," said Kassantini.

Al Jazira Bank gained 0.5 percent after the bank completed a SR1 billion ($267 million) 10-year Islamic bond sale which was four times oversubscribed.

UAE markets slipped as Air Arabia weighed on Dubai. Market is trading on technical indicators as volumes remain low and foreign interest is muted.

Air Arabia fell 9.1 percent, after its dividend payout. The stock accounted for a third of shares traded on the index.

Developer Emaar Properties shed 1.6 percent, giving back gains from Tuesday after its shareholders approved a surprise 10 percent cash dividend.

"Investors are not happy with Emaar’s 10 percent dividend," said Shadi Ramadan, head trader at Al Dhafra Financial Broker.

"They were expecting it to be around 20 percent."

Dubai’s index slipped 0.8 percent to 1,543 points, its week-low. The benchmark is down 5.4 percent this year.

"Technical indicators called for a correction. Every customer is a speculator in the market now. The lack of liquidity is making it difficult for the market," Ramadan said. Telco du added 2.6 percent ahead of an annual general meeting later Wednesday.

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Saudi Gazette