Saudi, Kuwait equity markets retreat

31/01/2017 07:48 AST

Middle Eastern equity markets diverged on Monday, with last week’s top gainers pulling back on profit taking while strong quarterly earnings from courier firm Aramex bolstered Dubai.

The Saudi Arabian index fell 0.7 percent, snapping seven consecutive sessions of gains.

Twelve of the 14 listed petrochemical producers pulled back as Brent oil futures fell near $55 a barrel. Saudi Basic Industries closed 0.8 percent lower.

But Nama Chemicals soared 9.1 percent, taking its gains since Wednesday to 31.5 percent. Last week the loss-making chemicals maker announced a recovery plan including eventually increasing capital to finance production of speciality chemical products and boost capacity. Miner Ma’aden added 1.2 percent after jumping 5.3 percent in the prior session on news of progress in expanding its phosphate and bauxite operations.

Analysts at Alrajhi Capital said that although fourth-quarter results for Ma’aden were healthy, there could be risks in the near term from softening commodity prices, especially aluminum. The Kuwaiti index pulled back 1.5 percent, its largest single-day drop in one year. The usually thinly traded market has outperformed its regional peers and is up 19 percent from the start of the year in very heavy trade.

Most large-cap shares fell on Monday with National Bank of Kuwait and logistics firm Agility each closing 1.3 percent lower.

Later on Monday, the government is expected to announce details of its long-term economic development plan; the market rose last week in anticipation of that and may be vulnerable to profit taking after the announcement.

In Qatar, the main index declined 1.3 percent. Companies often bought for their high dividend yields fell, with Doha Bank dropping 2.1 percent.

In Dubai, Aramex jumped 9 percent in its heaviest trade since November after reporting fourth-quarter net profit more than doubled to 131.8 million dirhams ($35.9 million).

Aramex’s chief executive said that although he expected to see strong growth in e-commerce deliveries in 2017, profit and revenue growth were seen slowing to below 10 percent this year. The main Dubai index recovered from weakness early in the session to add 0.3 percent as some speculative shares were bought after slipping in the previous session. Builder Arabtec added 3 percent.

In Abu Dhabi, smaller stocks were the top gainers, helping lift the index 0.1 percent. But International Fish Farming (Asmak) sank 10 percent. It as slumped 41.2 percent since Jan. 15, when an Asmak spokesman told Reuters a rumor that a well-known Abu Dhabi individual investor had bought a strategic stake in the company was false.

Egypt’s index pulled back 1.8 percent in modest volume, reflecting weaker global equities after US President Donald Trump’s immigration curbs. The index had ended last week on a firm footing in response to the success of the government’s international bond sale. Orascom Telecom, the most heavily traded stock, retreated 5.0 percent on Monday after jumping 8.0 percent on Sunday.

Foreign investors remained net buyers of Egyptian stocks. A research report by investment bank Exotix found Egypt was only moderately exposed economically to any worsening of US economic ties under a Trump presidency; export earnings, remittances, direct investment and aid obtained from the US were under 2 percent of gross domestic product.

Reuters