Kuwait Times - - BUSINESS -

Stock mar­kets in the Gulf re­treated yes­ter­day in shrink­ing trad­ing vol­umes as in­vestors turned cau­tious ahead of the US in­ter­est rate hike and guid­ance from the US cen­tral bank ex­pected late in the day. Petro­chem­i­cal shares, which have been drag­ging Saudi Ara­bia’s main in­dex lower over the last two ses­sions, fell fur­ther. The main in­dex lost 0.6 per­cent and all but one of the 14 listed petro­chem­i­cal pro­duc­ers fell. PetroRabigh dropped 3.3 per­cent.

Many an­a­lysts think the Saudi mar­ket’s up­trend is not re­vers­ing but stocks may take an ex­tended breather fol­low­ing a stel­lar per­for­mance over a six-week pe­riod which took the in­dex to a one-year high ear­lier this week. Yes­ter­day marked the mar­ket’s sec­ond con­sec­u­tive day of shrink­ing trad­ing vol­ume. The 2017 budget, ex­pected to be an­nounced late this month, looks likely to in­clude more do­mes­tic fuel sub­sidy cuts, which is prompt­ing some in­vestors to cash out of do­mes­tic de­mand-fo­cused shares for now.

Elec­tron­ics and book­store re­tailer Jarir fell 1.3 per­cent. In Egypt, the main in­dex pulled back a fur­ther 0.6 per­cent with sell­ing pres­sure es­ca­lat­ing in the fi­nal hour of trade. Losers out­num­bered gain­ers 24 to five with Oras­com Tele­com, the most heav­ily traded share, slump­ing 5.2 per­cent. Shares in the con­glom­er­ate have been beaten down 20 per­cent since the com­pany said its chief ex­ec­u­tive, bil­lion­aire Na­juib Sawiris, an­nounced early this month that he would step down. The com­pany did not give a rea­son for his de­par­ture, and an­a­lysts said the un­cer­tainty had hit in­vestor sen­ti­ment hard.

“Say­ing they are shut­ting down bank­ing oper­a­tions in North Korea and that their long-time CEO is leav­ing in one month’s time has left in­vestors feel­ing bat­tered,” said a Cairo-based equity an­a­lyst. Dubai’s in­dex fell for a sec­ond straight day, drop­ping 1.2 per­cent to 3,584 points.

It re­treated be­low ma­jor tech­ni­cal re­sis­tance on its Au­gust peak of 3,624 points. Trad­ing vol­ume shrank by roughly a half from the pre­vi­ous day’s very large amount. Most ac­tiv­ity fo­cused on mid-sized spec­u­la­tive shares, sug­gest­ing lo­cal short-term traders were the main play­ers and that for­eign in­vestors, who had been ac­tive buy­ers in pre­vi­ous days, had pulled back.

Builder Drake & Scull, the most heav­ily traded stock, fell 1.8 per­cent. Union Prop­er­ties lost 1.7 per­cent. Profit-tak­ing also hit Abu Dhabi, drag­ging the in­dex down 0.9 per­cent. Telecom­mu­ni­ca­tions op­er­a­tor Eti­salat fell 1.3 per­cent and First Gulf Bank dropped 1.9 per­cent.

Qatar’s main in­dex, which had out­per­formed its re­gional peers on Tues­day, re­treated 0.4 per­cent.

Com­mer­cial Bank lost 3.1 per­cent to 32.40 riyals on the first day of trad­ing of its rights is­sue, which will end on Dec. 28. The bank is of­fer­ing new or­di­nary shares at 25.50 riyals each. — Reuters

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