Tadawul, Qatar stocks drop

21/07/2016 05:09 AST

Stock markets in Qatar and Saudi Arabia were pulled lower on Wednesday by two blue-chip companies whose weak second-quarter earnings missed forecasts, while Egypt was hurt by a fresh slide of its currency in the black market.

Commercial Bank of Qatar slumped 6.6 percent after it posted a 63 percent drop in second quarter net attributable profit to 212.3 million riyals ($58.3 million); analysts polled by Reuters had forecast 339.5 million riyals.

Other Qatari banks also fell, even though they had reported strong earnings at the start of this week. Qatar Islamic Bank dropped 1.6 percent. The main Qatari index dropped 0.5 percent to 10,592 points, but closed 81 points above its session low.

In Saudi Arabia, Saudi Electricity Co. (SEC) dropped 0.5 percent after it reported a 28 percent fall in second-quarter net profit to SR1.4 billion ($381 million). Analysts at NCB Capital had forecast SR2.4 billion riyals.

SEC cited the higher cost of fuel and depreciation of assets, without elaborating. The Kingdom's 2016 state budget contained hikes in fuel and electricity prices but the company had previously said these would not have a significant effect on its earnings overall.

The main Saudi index edged down 0.2 percent at 6,631 points. But some Saudi banks fared well after several reported earnings that met expectations. Saudi Hollandi Bank rose 0.8 percent after reporting a flat net profit of SR540 million, beating the average analyst forecast of SR508 million.

In Egypt, the main index extended the previous day's decline and dropped 1.2 percent after the Egyptian pound weakened to 11.75 per dollar on the black market, its lowest level since that market emerged.

The central bank has been keeping the currency artificially fixed at 8.78 pounds since its devaluation in mid-March. Since the central bank's comments to local media on July 3 about the fixed currency rate being a "mistake", the pound has tumbled in the black market, and economists believe a further devaluation — possibly accompanied by further interest rate hikes — may be imminent.

DUBAI, ABU DHABI

In Dubai, Emaar Properties climbed 1.7 percent to 7.02 dirhams, its highest close in 11 months, in active trade.

It closed above technical resistance on its October 2015 peak of 7.01 dirhams; another such close on Thursday would trigger a reverse head and shoulders pattern formed by the highs and lows since last August and pointing up in the long term to at least the April 2015 peak of 8.39 dirhams.

Dubai's main stock index added 0.6 percent to 3,547 points on Wednesday. Abu Dhabi's index climbed by the same margin with support from large-caps; Aldar Properties, the largest listed property developer in Abu Dhabi, jumped 4.3 percent.

Arab News