Saudi’s Al Othaim outperforms index

Saudi Arabia’s supermarket and Abu Dhabi’s largest listed developer outperformed otherwise flat regional shares yesterday because of their strong second-quarter earnings.

Shares of Al Othaim Markets jumped 4.3 per cent after its second-quarter net income of 71.21 million Saudi riyals (Dh71.21m) exceeded expectations.

The company attributed the 43.1 per cent increase in net profit from the year before to growth in sales at existing and new branches, improvement in gross margin and increase in rent revenues from new leasable spaces.

Shares of medical equipment and hospital operator Al Hammadi fell 0.7 per cent after the US$1.2 billion company said it was discussing studying the “possibility of merger” with its the smaller National Medical Care. Its shares surged 6.1 percent.

Analysts at Alrajhi Capital said a merger might help both companies address their specific issues: declining operating profit in the past four quarters for Care and negative cash flow from operations in four of the five past quarters for Hammadi. Alrjahi said if the combination goes through it would create the kindgom’s largest listed healthcare provider.

The Tadawul index closed almost flat for the day and down 1.3 per cent for the week.

In Abu Dhabi, shares of the largest listed developer, Aldar Properties, climbed 1.3 per cent to Dh2.37 after it reported a 5.2 per cent drop in second-quarter profit to Dh600m, broadly in line with expectations. Although revenue fell by a fifth from the year before, off-plan residential sales in the second quarter showed resilience in demand for mid-income housing, said a note by Arqaam.

Government grants supported earnings growth in the second quarter, according to Arqaam, which has a positive outlook on project delivery. The index fell 0.3 per cent, as some shares that rose on the previous day fell on profit taking.

Dubai’s index added 0.4 per cent, its fifth straight session of gains as three of the five most valuable companies rose; Dubai Islamic Bank rose 1.5 per cent.

Qatar’s index rose 0.4 per cent in very thin trade, half of the six listed banks rose, with Commercial Bank adding 1.5 per cent.