Tadawul: Mobily continues recovery from August low

21/10/2015 05:33 AST

Saudi Arabia’s stock market fell on Tuesday in response to weak oil prices. Brent crude sank nearly 4 percent on Monday night and remained under pressure in Asian trade on Tuesday. This helped to push the Saudi stock index down 1.0 percent at the close. Some shares tumbled in response to poor third-quarter earnings, with Saudi International Petrochemical Co. (Sipchem) down 8.4 percent after it reported a 55.4 percent slump in net profit to SR71.6 million ($19.1 million). Analysts had forecast SR122.9 million.

Telecommunications firm Mobily added 3.6 percent to SR31.90, bringing its rebound from its August low to 47 percent. The stock has almost regained the SR33.80 level where it closed in June just before it was suspended for two months because of the market regulator’s investigation of its earnings restatements.

Mouwasat Medical Services, one of Saudi Arabia’s largest listed health care providers, dropped 2.0 percent after reporting a 40.3 percent fall in profit to SR43 million; analysts had forecast SR64 million.

Savola Group, Saudi Arabia’s largest food products company, slipped 1.3 percent after reporting a 47 percent fall in profit to SR371.6 million; analysts had forecast on average SR411 million. The company also cut its third-quarter dividend.

However, real estate shares reacted calmly to news that the Cabinet had submitted a proposal to the advisory Sohura Council to impose a fee of up to SR100 per square meter on undeveloped land. The council is expected to complete its study of the proposal within 30 days, though it is not clear when the tax would actually be imposed.

The stock market’s property sector index dropped about 10 percent in late March after the cabinet decided in principle to impose such a tax, because of a belief that the value of real estate developers’ land banks would shrink. But real estate blue chip Dar Al-Arkan fell only 0.7 percent on Tuesday, suggesting investors have now largely factored in the expected tax. Dubai’s stock index fell 0.6 percent while Abu Dhabi and Qatar were almost flat.

However, Qatar Gas Transport (Nakilat) rose 4.1 percent and was its market’s most heavily traded stock after the firm decided to raise its foreign ownership limit to 49 percent from 25 percent. Foreigners currently hold about 8.8 percent of the company, according to exchange data.

Arab News