Aramco interest in Sabic weighed up

Arabian Gulf stock markets were muted on Thursday, with Saudi Basic Industries Corporation little changed in Saudi Arabia after Saudi Aramco said it was in early talks to acquire a stake in the petrochemical giant.

Sabic, the largest listed company in the Gulf and the world’s fourth-biggest petrochemicals company, closed up by 0.2 per cent after edging between positive and negative territory earlier in the session.

That suggested investors were still assessing the possible impact on Sabic of a plan for Saudi Aramco to buy a strategic stake in the company.

Aramco said on Thursday that it was in “very early stage discussions” with the kingdom’s Public Investment Fund to acquire the stake in Sabic via a private transaction. It has no plans to acquire any publicly held shares, it said. Reuters reported on Wednesday that the government was considering a plan for Aramco to buy a stake in the petrochemical maker.

In Saudi Arabia, the index was flat, closing down 0.03 per cent.

The biggest drag was provided by Al Rajhi Bank, which closed down 2 per cent. Al Rajhi and some of the other large banks are still to report their second-quarter results.

In Abu Dhabi, First Abu Dhabi Bank, was the biggest gainer, rising by 1.5 per cent. The lender is expected to report its earnings next week. The Abu Dhabi index rose 0.3 per cent, with thin trading on many shares.

Emaar Properties was the biggest weight on Dubai’s index, falling 1.2 per cent. The developer has put $1.4 billion in non-core assets up for sale amid an economic downturn, the Financial Times reported this week .

The Dubai index edged 0.2 per cent lower.

Meanwhile, trade war concerns and dollar strength continued to cast a shadow over emerging market currencies on Thursday, with China’s yuan weakening to a one-year low while the South African rand fell more than 1 per cent.

The dollar has been supported by US Federal Reserve chairman Jerome Powell’s upbeat testimony this week.

Worries about a more protectionist world have weighed on emerging markets. MSCI’s benchmark emerging stocks index fell 0.6 per cent, its third day of losses this week, with selling across Asia and emerging Europe.