Almarai stock sale weighs on Tadawul

Shares of Saudi Arabia’s top food producers, Savola and Almarai, fell yesterday after Savola said it was selling a small stake in the dairy maker, while Qatar’s bourse closed at a 52-month low as foreign funds continued to exit.

The Riyadh index fell 0.3 per cent with Savola declining 1.8 per cent to 46.55 Saudi riyals, after initially surging to an intra-day high of 49.60 riyals in the opening minutes of the session. Savola said it was selling a 2 per cent stake in Almarai for 1.12 billion riyals through an accelerated book-building process, with 16 million shares on offer at 70 riyals each.

Analysts said the deal could help create liquidity for Savola in case it conducts acquisitions.

If the sale is fully completed, Savola will record a profit of 694.1 million riyals in the third quarter, the company said.

Shares in Almarai plunged by their 10 per cent daily limit to 73.60 riyals in the heaviest trade since late June.

Banque Saudi Fransi fell 0.6 per cent to 31.40 riyals, extending Tuesday’s 4.2 per cent loss after the billionaire Prince Alwaleed bin Talal’s Kingdom Holding agreed to buy almost half of Credit Agricole’s stake in the Saudi lender.

Analysts are split on how the deal would affect Saudi Fransi. Some believe it is good news to have Prince Alwaleed on the board; others think Credit Agricole may ultimately sell all its shares, hurting the Saudi bank in the long run.

Arqaam Capital maintained its “buy” rating on Saudi Fransi with a target price of 35.80 riyals, saying the bank might lose a strategic partner if Credit Agricole sold the rest of its stake, but Saudi Fransi’s high dividend was an attraction.

Abu Dhabi’s index slipped 0.4 per cent, weighed down by declines in blue chips; Abu Dhabi Commercial Bank fell 2.1 per cent.

But Dana Gas, the most heavily traded stock, climbed 1.3 per cent.

In Dubai, the index closed almost flat. A Cityscape Global real estate exhibition in Dubai sparked some interest in property stocks early this week but the effect has worn off because of the uncertain outlook for the emirate’s property market.

Egypt’s main index fell 0.2 per cent mainly, because of a 2.1 per cent decline in the most active stock, Qalaa Holdings.