Saudi stocks hit by profit-taking

05/07/2017 05:34 AST

Most major Middle Eastern stock markets fell on Tuesday as Saudi Arabian blue chips were hit by a major wave of profit-taking and Qatar fell before a diplomatic deadline set by other Gulf Arab states.

In late June, before a one-week Eid Al-Fitr holiday, the Saudi market surged after index compiler MSCI said it would consider upgrading Riyadh to emerging market status and economic reformer Prince Mohammed bin Salman was promoted to the post of crown prince. But many fund managers consider Riyadh close to fully valued, leaving it open to profit-taking. On Tuesday, the index fell 2.6 percent, its biggest drop since last October, in thin trading volume. Selling accelerated toward the close.

A purchasing managers’ survey released on Tuesday showed Saudi business conditions remained tough, with growth of the non-oil private sector slowing to an eight-month low in June.

Banking stocks, which were among the top gainers in late June, were the biggest losers on Tuesday. National Commercial Bank, the largest lender, plunged 7.9 percent. Maaden slipped 4.9 percent.

Falling stocks outnumbered gainers by more than two to one. Wafa Insurance rose 2.6 percent after the central bank said it would let the company accept new subscribers in vehicle insurance, lifting a suspension on this activity.

Qatar’s stock market rose in early trade but the index closed 0.5 percent lower in moderate volume. Foreign investors, who had been net buyers of stocks for the last several days, were roughly neutral, exchange data showed.

Dubai’s index fell 0.3 percent as blue chip Emaar Properties slid 1.3 percent. GFH Financial, the most heavily traded stock, rose sharply in early trade after saying it had obtained approval from the central bank of Bahrain to buy back up to 5 percent of its issued treasury shares. But it closed 0.9 percent lower; the stock had already surged 6.3 percent on Monday.

Builder Arabtec soared 10.6 percent after saying it had won a 353 million dirham ($96 million) contract to build the UAE pavilion at the Expo 2020 world's fair in Dubai — a vote of confidence in the company by authorities in Abu Dhabi.

Arab News