Banks drag down Saudi, Gulf mostly slug­gish; Egypt up

Kuwait Times - - BUSINESS -

Bank­ing shares dragged Saudi Ara­bian stocks lower yes­ter­day 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. Yes­ter­day, 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.

Heav­ily traded stock

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 pro­gram 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. —Reuters

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