Saudi stocks recover after missing Q4 estimates

25/01/2017 05:35 AST

Saudi Arabia’s stock market continued rebounding on Tuesday in a generally strong Gulf region.

The Tadawul All Share Index (TASI) climbed 1.1 percent, adding to Monday’s 1.7 percent gain. With the fourth-quarter earnings reporting season more or less over, many Saudi firms have posted flat or weak profits because of government austerity steps and a sluggish economy. Over half a dozen major firms, including Savola and several banks, missed analysts’ estimates by wide margins.

But stocks in most companies, which missed estimates have recovered strongly, suggesting investors are looking toward improvement in the nonoil economy this year as the government’s introduction of austerity measures slows.

Mouwasat Medical Services jumped 3.5 percent after saying its board was recommending a cash dividend of SR2.5 ($0.67) per share for 2016, up from SR2 ($0.53) in the previous year. The company reported an estimate-beating 34.2 percent rise in fourth-quarter profit last week.

Savola surged 3.3 percent. It had dropped 2 percent on Sunday after reporting a shock fourth-quarter net loss, but jumped 5.4 percent on Monday.

Kuwait’s index climbed 0.9 percent as trading volume remained extremely high, though it fell slightly from Monday’s level. The index is up 17 percent since the end of last year, causing funds and individual speculators to pile into the market to catch the momentum. Dubai’s index rose 0.3 percent as GFH Financial jumped 11.2 percent. It also soared during the day on Monday but gave up all its gains by the close on that day.

In Qatar, the index rose 1 percent as Islamic bank Masraf Al-Rayan, the most heavily traded stock, rose 4.6 percent to a 14-month high.

Egypt sank 0.9 percent as Emaar Misr dropped 4.3 percent to 2.67 Egyptian pounds ($0.14), confirming a break of technical support at 2.80 pounds ($0.15), the bottom of its range since mid-November.

Arab News