Regional stocks down across the board
Arabian Gulf stock markets fell yesterday, with Saudi Arabia losing over 1 per cent as investors turned cautious ahead of US President Donald Trump’s announcement about the fate of the Iran nuclear deal.
In Saudi Arabia, the index closed down 1.3 per cent to 8,013 points, dented by telecommunications shares as Zain Saudi slumped 10 per cent after reporting it swung to a loss in the first quarter, losing nearly 2 million subscribers over the period.
Zain Saudi, part-owned by Kuwait’s Zain Group, lost 77 million Saudi riyals in the January-March period, compared with a profit of 45m riyals a year ago. EFG Hermes and Al Rajhi Capital had forecast losses of 42.5m riyals and 33m riyals.
Saudi Telecom dropped 1.8 per cent and in Kuwait, parent Zain slid 2.0 per cent.
A decision by Mr Trump to pull out of the nuclear deal could raise geopolitical tensions in the Gulf moderately, fund managers said.
But the impact might be offset by the fact that Iran tensions have been pushing up oil prices, boosting Gulf governments’ income, and because Gulf Arab economies have minimal trade and investment links with Iran.
Shares in Saudi Arabian food producer Savola Group, one of the few listed Gulf companies with major operations in Iran, edged down 0.4 per cent yesterday. They have underperformed the Saudi market slightly this year, partly because of Iran tensions.
“It seems investors are liquidating positions prior to the beginning of the holy month of Ramadan,” said Vrajesh Bhandari, portfolio manager at Dubai’s Al Mal Capital.
“Current market conditions support a consolidation move – valuations have run up and call for a brief profit-taking,” he said. The Saudi index has eased off by almost 4 per cent from a more than two-year high hit on April 24. In Abu Dhabi, the index fell 1.3 per cent to 4,479 points. Gainers were led by Abu Dhabi National Takaful, which surged 12.8 per cent, and Arkan, which put on 3 per cent. Fallers included NBQ, down 9.7 per cent and Watania, which closed 8.7 per cent off.
The Dubai index was down 0.5 per cent to 2,949 points, partly supported by market heavyweight Emaar Properties, which was up almost 1 per cent. Dubai Financial Market plunged 4.4 per cent after its first-quarter net profit dropped by more than half.