Gulf up on oil price, Egypt falls on Saudi prod­uct halt

Kuwait Times - - BUSINESS -

Most ma­jor bourses in the Gulf rose yes­ter­day as oil prices held near one-year highs, while Egypt re­treated af­ter news that Saudi Ara­bia had sus­pended oil prod­uct sup­plies to the coun­try this month. Riyadh’s stock in­dex gained 1.5 per­cent, trim­ming its loss over the last four weeks to 8.4 per­cent. All 14 listed petro­chem­i­cal pro­duc­ers ad­vanced af­ter Brent oil fu­tures surged as much as 3 per­cent on Mon­day. Saudi Ba­sic In­dus­tries , which has not yet re­ported its third-quar­ter re­sults, added 0.6 per­cent.

The pos­i­tive mood spilled into other sec­tors with re­bounds in some shares that had been beaten down over the last sev­eral weeks by the govern­ment’s spend­ing cuts. Retailer Fawaz Al­hokair jumped 3.9 per­cent and su­per­mar­ket op­er­a­tor Al-Othaim added 3.4 per­cent.

But Riyad Bank, the first Saudi bank to re­port third-quar­ter earn­ings, dropped 2.1 per­cent af­ter it posted an 18.9 per­cent fall in net profit as costs rose. It made 729 mil­lion riyals ($194.4 mil­lion) in the three months to Sept. 30, down from 899 mil­lion riyals in the same pe­riod of 2015. An­a­lysts polled by Reuters had on av­er­age forecast 1.05 bil­lion riyals.

Egypt’s main in­dex re­treated 1.6 per­cent to 8,233 points with in­vest­ment firm Qalaa Hold­ings tum­bling 5.3 per­cent, tak­ing its loss over the last three days to nearly 20 per­cent af­ter it re­ported a sharply wider quar­terly net loss. All but three of the traded shares in the in­dex de­clined. The largest lender, Com­mer­cial In­ter­na­tional Bank, fell 1.5 per­cent. Saudi Aramco 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, a govern­ment of­fi­cial told Reuters on Mon­day. “The mar­ket re­acted neg­a­tively to the news about Aramco stop­ping its sup­ply of petroleum prod­ucts, and this, cou­pled with the fact that the in­dex failed to break the re­sis­tance bar­rier of 8,500 points, led to prof­ittak­ing,” said Ibrahim Nimr, head of tech­ni­cal anal­y­sis at Cairo-based Naeem Bro­ker­age. Wafik Dawood, port­fo­lio man­ager at Cairo’s Com­pass Cap­i­tal, said of Saudi Aramco’s de­ci­sion: “The un­cer­tainty about whether this is a one-off event or will be the new sta­tus quo is what is cre­at­ing volatil­ity in the mar­ket.” — Reuters

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