Syria tensions weigh on Gulf stocks

Most Gulf stock markets closed lower on Thursday as the threat of US military action in Syria kept investors on the sidelines, but the Saudi Arabian market stabilised after a sell-off on the previous day.

In Egypt, the index fell 1.8 per cent as investors booked profits, overwhelming a 1.4 per cent gain on Wednesday. Banking and property stocks were hit hard with Commercial International Bank falling 3.3 per cent.

Property firm Madinet Nasr for Housing and Development dropped 6.5 per cent after soaring on Wednesday on news that it would discuss a possible merger with Sodic. Sodic rose a further 1.8 per cent.

Saudi Arabia’s index was up 0.3 per cent, regaining some strength after Wednesday’s 1.9 per cent slide. The index is still up 8 per cent this year on fund flows that occurred before index compiler FTSE Russell announced in late March that it would upgrade Riyadh to emerging-market status.

“One has to remember that the Saudi market’s recent rally has been mainly flow-driven, so investors will be tempted to book profits in the short term,” said Nishit Lakhotia, head of research at SICO.

Al Rajhi Bank ended 0.9 per cent higher, but many other banking shares ended lower with Saudi British Bank falling 2.6 per cent.

Retailer Jarir Marketing edged down 0.1 per cent, closing well off the day’s lows, after reporting a fall in first-quarter estimated net profit to 219.1 million riyals, in line with analysts’ estimates.

Dubai’s index closed 1.2 per cent lower, weighed down by property stocks. Emaar Properties, the largest property developer, dropped 2 per cent.

Amusement park operator DXB Entertainments rose early after it said first-quarter visits totalled a record 851,000, up 45 per cent from a year earlier. But the rally ran out of steam and the stock closed 1.6 per cent lower.

The Abu Dhabi index slipped 0.8 per cent, hit by weak financial and property stocks. Aldar Properties fell 1.9 per cent.

Qatar’s index lost 1.1 per cent, hurt by banking stocks with Commercial Bank tumbling 4.3 per cent. But the index still rose 1.4 per cent over the week after several bluechip firms raised foreign ownership limits, which promises to increase their weights in emerging market indexes.