Saudi stocks slip; other Gulf markets rise

21/04/2015 00:37 AST

Saudi Arabia’s bourse pulled back slightly yesterday after several companies reported poor first-quarter earnings; other Gulf markets were positive, although disappointing earnings slowed Qatar’s advance.

The main Saudi index edged down 0.3% to 9,589 points, having surged 4.0% in the previous session on news that the market regulator would allow foreigners to buy local stocks directly from June 15.

Petrochemicals and titanium producer National Industrialisation Co (Tasnee) tumbled 5.4% after the firm said it had swung to a first-quarter net loss, which it blamed on lower sales prices and adverse moves in foreign exchange hedging contracts at a subsidiary.

Tasnee made a net loss of 332.5mn riyals ($88.7mn) in the quarter; Sico Bahrain and NCB Capital had forecast Tasnee would make a quarterly net profit of 150mn riyals and 151mn riyals respectively.

Retailer United Electronics fell 9.7% after reporting a 46% slump in first-quarter profits; the market had expected a profit boost from King Salman’s order to pay two months’ bonus salary to public sector employees during the quarter.

Another retailer, Fawaz Abdulaziz Alhokair Co, surged 4.6% after posting a 5.7% rise in quarterly profit.

Saudi Telecom, the Gulf’s biggest telecommunications operator by market value, jumped 3.2% having reported a 4.7% rise in first-quarter profit. It made a net profit of 2.50bn riyals; analysts polled by Reuters had on average expected 2.32bn riyals.

Saudi Arabia’s largest food products firm, Savola Group, rose 3.5% after posting an 11.2% jump in first-quarter earnings on Sunday, exceeding its own forecast.

The firm made 470.5mn riyals ($128.2mn) in the quarter, or 214.3mn riyals without gains from the sale of a subsidiary, against its forecast of 178mn riyals. But Savola said profit in the second quarter would be 429mn riyals, down from 513.3mn riyals in the same period last year.

Interior Ministry spokesman Mansour Turki said yesterday that Saudi Arabia had put security forces on alert for a possible militant attack on a shopping mall or energy installation, and this may have made some investors more cautious.

The Saudi index faces major technical resistance in the 9,572-9,745 point area, where the 200-day average roughly coincides with the March peak; it would need to break cleanly above that area to signal another leg up.

Dubai’s index rose 1.8% as property developer Damac continued to dominate trading, surging 11.8% to a new all-time closing high of 3.31 dirhams. The firm’s board will discuss first-quarter results and dividends on Tuesday.

Logistics firm Aramex jumped 5.5% after its shareholders approved the distribution of a 0.14 dirham dividend for 2014, up from 0.12 dirham a year earlier.

Abu Dhabi stocks rose 0.7% and Union National Bank jumped 3.5% after it reported a 20% rise in first-quarter net profit. The lender made 610.8mn dirhams ($166.3mn), while analysts polled by Reuters had forecast an average of 547.4mn dirhams.

Qatar’s index underperformed the Gulf and edged up just 0.2%, largely because petrochemicals and metals company Industries Qatar fell 1.1%, having posted a 40% drop in first-quarter net profit.

The firm reported a profit of 951mn riyals ($261.2mn) for the three months to March 31, while analysts polled by Reuters had on average expected 1.11bn riyals.

Egypt remained gloomy after its rally ran out of steam last week. The Cairo index fell 1.9% yesterday despite strong earnings from Emaar Misr, the Egyptian arm of Dubai developer Emaar Properties - it posted a nearly six-fold increase in quarterly profit on Sunday. The company has applied for listing but has not yet carried out a public offer or started trading in Cairo.

Gulf Times