20/12/2016 05:36 AST
Saudi stocks shrugged off gains from higher oil prices on Monday, as petrochemical heavyweight SABIC slumped following the news of its dividend announcement.
The Tadawul All-Share Index (TASI) fell 0.9 percent to close at 7,077 points, with all sectors in the red except REITs and energy and utilities.
Volumes traded amounted to SAR5 billion, while the advance/decline ratio was 25/138.
The index was dragged by SABIC, which fell 3.6 percent to SR 91.75. The company said on Monday that it had approved distributing a 20 percent cash dividend at the rate of SR2 per share for the second half of 2016 — lower than its dividend for H2 2015.
Sector-wise, the petrochemicals sub-index saw the biggest decline, with Saudi Kayan and Yansab both falling 2.9 percent to SR 8.7 and SR 50.75, respectively. Sipchem, meanwhile, rose 2.1 percent to close at SR 16.75.
The banks and financial sector also closed lower. However, blue chip Al-Rajhi Bank reversed losses from the previous session, gaining 0.7 percent to close at SR 63.5.
Elsewhere, Saudi Cable Co. was among the top gainers for the day, rising 3.5 percent to SR6.25. The company said on Sunday that its 94 percent-owned subsidiary, Elimsan Switchgear, has received a purchase order worth $50 million.
Mideast markets
Egypt’s stock index surged 3.1 percent in heavy trade on Monday as the Egyptian pound depreciated against the US dollar, prompting more buying by foreign funds, while Gulf bourses diverged.
Twenty-seven of the 30 most liquid Egyptian shares rose, taking the index to a fresh eight-year high, with Telecom Egypt and Global Telecom Holding each jumping to their 10 percent daily limits.
Overall, many investors consider currency weakness a positive for the stock market in the short term because it makes prices more attractive for foreign investors, and may drive local funds into stocks as a hedge against inflation.
“The dollar rate is keeping up the appetite” for stocks among foreign funds, said Wafik Dawood, portfolio manager at Compass Capital.
Gulf mixed
The index in Qatar, which was closed for a public holiday on Sunday, rose 0.5 percent but finished well below its intra-day high. Qatari Investors Group was the top performer, jumping 9.9 percent.
On Thursday Qatar published a 2017 state budget that projected a deficit of 28.3 billion riyals ($7.8 billion), much smaller than the originally projected 2016 deficit, and total spending of 198.4 billion riyals, down from 202.5 billion.
Although that is slightly contractionary, it is less so than the 2016 budget, and the government plans to increase capital spending next year. It did not announce any major new austerity measures; the budget’s conservative oil price assumption of $45 a barrel suggests the government has plenty of room to meet its targets next year.
Dubai’s main index lost 0.6 percent to 3,532 points in a second consecutive day of thin trade, retreating further from technical resistance on the August peak of 3,624 points, which it tested and failed to break decisively last week. Emaar Properties lost 0.9 percent.
Blue chips were weak in Abu Dhabi, where the index slipped 0.4 percent; telecommunications operator Etisalat ETEL.AD lost 1.6 percent.
Arab News
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