Gulf stocks retreat from highest level
Stocks across the Gulf fell, following a drop in global markets, as traders cashed in on gains after a gauge of the region's biggest companies climbed to a threeweek high.
The Bloomberg GCC 200 Index, which tracks some of the six-nation Gulf Cooperation Council's 200 largest companies, slipped 0.8 percent as of 1:24 p.m. in Riyadh from the highest level since Jan. 11. The Tadawul All Share Index, the region's biggest declining gauge, retreated 1.2 percent, followed by ADX General Index's 0.9 percent drop. The MSCI World Index lost 1.6 percent on Friday.
"Markets have had a good run, now we're seeing a bit of profit taking," said Wafic Nsouli, the managing director and head of equities at Dubai-based investment bank Arqaam Capital Ltd.
Stocks in the GCC have whipsawed this year as oil prices fluctuated and investors fretted about slowing economic growth in China, a major trading partner for the region. Brent crude, which accounts for most government income in the GCC, dropped a second day on Friday as growing U.S. crude stockpiles signaled a persisting global glut that's proving a hurdle for any sustained rally. The Gulf is home to about 30 percent of the world's proven oil reserves.
Saudi Arabia's benchmark index was poised for its first drop in three days led by Jabal Omar Development Co. The company fell 2.3 percent to the lowest level in more than two weeks.
The kingdom would be willing to contribute ground troops as part of a wider campaign against Islamic State in Syria, Al-Arabiya television reported on Friday, citing Ahmed Asseri, the spokesman for the Saudi-led coalition fighting in Yemen.
"Sending ground troops to Syria is a concern given the cost to fund these military excursions," said Nayal Khan, the Riyadh-based head of institutional equities sales trading at Saudi Fransi Capital. "It signals an escalating geopolitical risk in the region. Any protracted military response is likely to deepen negative sentiment in the market and add pressure on the budget." Dubai's DFM General Index lost 0.7 percent, the first decline in three days, as trading volumes dropped to about two-thirds of the 12-month daily average. Emaar Properties PJSC was one of just five stocks to gain in the sheikhdom. The developer, whose skyscraper design was approved by Dubai's ruler on Saturday, added 0.9 percent to the highest level since Jan. 5.
The new project is "a sign of commitment of Dubai in terms of expanding construction and continuing its real estate infrastructure," said Tariq Qaqish, the head of asset management at Dubai-based Al Mal Capital PSC.
In neighboring Abu Dhabi, First Gulf Bank PJSC fell 1.7 percent to 11.50 dirhams. The United Arab Emirates's third-biggest lender was one of the biggest contributors to the gauge's 5.9 percent increase last week, the strongest advance since May 2014. "Abu Dhabi is being dragged down by FGB after its recent run up to almost 12 dirhams a share," Arqaam's Nsouli said.
Qatar's QE Index lost 0.7 percent, led by Industries Qatar QSC, the country's biggest petrochemicals company by revenue. It retreated 2.8 percent after reporting a 30 percent plunge in profit for 2015. The MSM30 Index in Oman advanced 1.1 percent and Kuwait's SE Price Index gained 0.2 percent. Bahrain's Bourse All Share Index was little changed.