Gulf stocks re­treat from high­est level

The Pak Banker - - MARKETS/SPORTS -

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.

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