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