Saudi stocks rise for 10th day; Gulf markets mixed

11/08/2014 08:12 AST

Saudi has gained over 8% on back of foreign investment reform; buying has wide focus, includes telecoms, medical care; Dubai’s Drake & Scull tumbles 4.2% on surprise Q2 profit drop; Dana Gas edges up after favourable Iran gas ruling; Taqa falls after suspending Iraqi Kurdistan operation

Middle East stock markets were mixed yesterday as turnover in most places shrank to low levels, although Saudi Arabia rose for a tenth straight day as it continued a rally triggered by its plan to allow direct foreign investment in equities.

The Saudi index climbed 0.3% to a six-year closing high of 10,579 points and has gained 8.6% in the past ten trading days.

Alinma Bank was the second most heavily traded stock, rising 1.8%, but by and large attention has shifted beyond the large-cap banks and petrochemical firms which foreign investors are expected to favour, to a wide variety of shares. The most heavily traded yesterday was telecommunications operator Zain KSA, which climbed 2.0%.

Medical care for the growing Saudi population is a major theme for prospective foreign investors. Hospital firm Al Hammadi, which listed at an IPO price of 28 riyals in mid-July, jumped 7.5% to a fresh record closing high of 79.25 riyals.

Dubai’s index edged up 0.1%. Budget carrier Air Arabia gained 2.2% after reporting its second-quarter net profit more than doubled to 173mn dirhams ($47.1mn), well above analysts’ average forecast of 123mn dirhams.

But construction firm Drake & Scull sank 4.2% after reporting a 41% drop in second-quarter net profit, as delays on major projects in Saudi Arabia hit earnings. Drake made a profit of 25.88mn dirhams; analysts had predicted 48.8mn dirhams.

In Abu Dhabi, Dana Gas rose 1.5% after it said an international tribunal had issued a favourable ruling in the dispute over a natural gas supply contract between its affiliate Crescent Petroleum and Iran - although it remains unclear when supply might actually resume.

However, Abu Dhabi National Energy Co (Taqa) fell 1.8% after saying it had suspended its activity at the Atrush Block in Kurdistan because of the mounting instability in that area.

Kuwait’s Agility, the largest listed Gulf Arab logistics company, rose 1.2% after reporting a 12.2% rise in second-quarter net profit.

Another Kuwaiti stock, Gulf Petroleum Investment jumped 4.8% as its trading volume ballooned to its highest level since January.

Kuwait’s index edged up 0.1% to 7,193 points.

Elsewhere, Abu Dhabi’s index rose 0.4% to 4,943 points; Bahrain’s measure fell 0.4% to 1,488 points, while Oman’s index edged down 0.1% to 7,329 points.

Egypt’s benchmark dropped 0.4% to 9,117 points.

Reuters