Home » Gulf Stocks » Banks drag down Saudi, Gulf mostly sluggish

Banks drag down Saudi, Gulf mostly sluggish

epa04895982 Gulf investors follow stock market developments at the Dubai Financial Market, Dubai, United Arab Emirates, 24 August 2015. Global shares plunged 24 August after stocks in Shanghai crashed as a global market sell-off took hold amid growing fears about the state of China's economy. The sharp falls in stocks around the world came in the wake of growing investor concerns about the threat posed to global growth by the economic slowdown under way in China - the world's second biggest economy.  EPA/ALI HAIDER

DUBAI / Reuters

Banking shares dragged Saudi Arabian stocks lower on Sunday while most other Gulf markets were sluggish as investors waited for third-quarter corporate earnings announcements. Good news on Egypt’s International Monetary Fund loan boosted that market.
The Saudi stock index sank 2.2 percent as the banking index tumbled 4.5 percent. Banque Saudi Fransi plunged by its 10 percent daily limit in very thin trade.
Banks have been hit in recent weeks by concern that the slumping construction sector could saddle them with bad debt, and by the central bank’s decision to have them reschedule consumer loans to customers whose incomes have been hit by the government’s cuts to public sector allowances.
On Sunday, the Okaz newspaper reported, citing unnamed sources, that the central bank had told banks to postpone for a month receiving payments on such loans as part of the rescheduling process – a fresh sign that banks are being required to bear much of the burden of Saudi Arabia’s austerity drive as oil prices sag. Central bank officials were not available to comment.
Telecommunications firm Zain Saudi fell 5.4 percent, continuing a pull-back after surging early last week on hopes it would benefit from deregulation of the sector.
But retailer Jarir Marketing climbed 1.8 percent after it reported a net profit of 220 million riyals ($58.7 million) for the three months to Sept. 30, up from 218.5 million riyals a year earlier. Analysts polled by Reuters had predicted 200.6 million riyals.
Dairy firm Almarai gained 1.4 percent after posting a 10 percent rise in quarterly profit to 654.6 million riyals. Analysts had forecast 627.8 million riyals.
Dubai’s index edged down 0.2 percent. DXBE Entertainments, due to open some of its theme park facilities at the end of this month, was the most heavily traded stock; it closed 1.3 percent lower.
Abu Dhabi’s index dropped 0.6 percent as Abu Dhabi Commercial Bank slipped 0.9 percent, while Qatar edged down 0.02 percent in very thin trading volumes.
Oman’s tiny market outperformed the region with its index climbing 1.5 percent as banks surged, with Bank Dhofar MBDOF.OM> jumping 8.7 percent. Subscriptions to the bank’s rights issue run from Oct. 5 to 19. Last week, the Times of Oman quoted the Muscat Securities Market’s director-general as saying the bourse would halve brokerage fees for day traders by mid-November in order to encourage more activity; this could improve liquidity in the market, making banking and other stocks more attractive.
In Egypt, the index rose 0.8 percent after a senior IMF official said the Fund’s initial loan payment to Egypt would be about $2.5 billion and that he hoped to secure board approval for the $12 billion programme within the next month.
El Saeed Contracting and Real Estate jumped 3.5 percent to 0.89 Egyptian pound after it said it was buying 17 million treasury shares at 0.96 pounds per share.
But investment firm Qalaa Holdings plunged 8.3 percent after reporting a sharply wider quarterly net loss.

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to a friend