MIDEAST STOCK MARKETS
Saudi Arabia’s stock market rebounded on the back of banking shares yesterday while other major Gulf bourses were firm, with builder Drake & Scull leaping in Dubai after it replaced its chief executive. The Saudi stock index, which had tumbled 2.2 percent on Sunday as banks dropped because of concern about the impact of government austerity policies on their balance sheets, closed yesterday 1.2 percent higher in moderate trading volume.
The banking index, which had plunged 4.5 percent on the previous day, bounced back 1.9 percent. Qassim Cement dropped 1.5 percent after reporting a 29 percent year-on-year drop in third-quarter net profit, citing lower demand for cement as well as cost increases due to cuts in state subsidies for electricity and fuel. But Saudi Arabia Fertilizers Co rose 1.2 percent after it and Saudi Basic Industries said they had hired investment banks to advise on the potential sale of a stake in the Ibn Al-Baytar fertilizer company, a 50-50 joint venture between them. SABIC fell 0.3 percent.
Dubai’s index rose 0.3 percent as Drake & Scull, the most heavily traded stock, surged 7.0 percent after saying it had appointed chief operating officer Wael Allan as its new chief executive, replacing Khaldoun Tabari, a major shareholder. Drake & Scull’s chief financial officer, Kailash Sadangi, told Reuters in August that the company had asked advisers for proposals to review its business and find strategic investors. The change at the top of the company could clear the way for new investment and fresh action to stem its losses.
Abu Dhabi’s index gained 0.6 percent as First Gulf Bank rose 2.2 percent, while strength in Industries Qatar and telecommunications firm Ooredoo helped Qatar’s index climb 0.5 percent. Egypt, which had risen strongly for four straight days on signs the country is nearing the completion of its $12 billion loan deal with the International Monetary Fund, fell back 0.9 percent.
In a sign that Saudi Arabia may be becoming less willing to support Egypt financially as its own finances are weakened by low oil prices, an Egyptian official told Reuters that the Saudis had informed the Egyptian General Petroleum Corporation, Egypt’s state oil company, in early October that it would halt the supply of refined oil products to Egypt.
Investment firm Qalaa Holdings, which had plunged 8.3 percent on Sunday after reporting a sharply wider quarterly net loss, was the most heavily traded stock yesterday and lost a further 7.6 percent. Global Telecom pulled back 4.1 percent. — Reuters