Profit taking drags most Gulf markets

First quarter earning optimism fades

DUBAI, April 13, (RTRS): Profit taking dragged most stock markets in the Middle East lower on Thursday, erasing most of the previous session’s gains as some of the optimism generated by generally positive first quarter results faded.

Saudi Arabia’s index retreated 0.3 percent, after rising 0.9 percent on Wednesday when Saudi British Bank reported an earnings beat and banking shares rose.

The optimism failed to keep markets afloat even though another lender, Banque Saudi Fransi, reported first-quarter results that exceeded estimates after Wednesday’s market close.

Fransi’s shares fell 2.6 percent and most of its peers also declined. National Commercial Bank, which is expected to report earnings early next week, fell 2.1 percent and SABB lost 0.7 percent.

Telecommunications operator Zain Saudi, which had soared its 10 percent daily limit on Wednesday after reporting its first-ever net profit and surpassing analysts’ forecasts, fell 0.5 percent with selling momentum building in the final hour of trade.

Alrajhi Capital said given a saturated industry, high gross margin levels - which are similar to market leader’s - and relatively high gross capex as percent of sales, which helped the company achieve a strong growth, it may be a challenge for Zain Saudi to top those results in the near future.

Elsewhere, in Dubai the index dropped 0.9 percent with 30 shares declining and only one advancing.

Shares of second- and third-tier companies, often traded by local day traders, were some of the top losers. Troubled builder Arabtec lost 2.4 percent and peer Drake & Scull fell 2.6 percent.

Dubai Islamic Bank, which was trading higher most of the session, edged down 0.3 percent. Shares of the largest Islamic bank in Dubai have been positive since it reported modest growth in first-quarter net profit earlier this week. National Cement fell 2.8 percent as its shares went ex-dividend on Thursday.

In Abu Dhabi, real estate shares were the main drag on the index, which fell 0.8 percent. Heavyweight Aldar Properties dropped 1.9 percent and RAK Properties lost 1.6 percent.

In Oman, Bank Muscat rose 1.0 percent after it reported a 1.1 percent growth in its first-quarter net profit to 44.2 million rials ($114.8 million), at the upper end of analysts’ estimates. The index closed 0.3 percent higher.

Egypt’s index fell 0.1 percent and is now down 1.0 percent for the week. Liquidity was being sucked out of the market after the bombing of two churches killed at least 45 people on Sunday and two days later the parliament declared a three-month state of emergency.

Tourism related shares were some of the worst performers, with Egyptian Resorts dropping 1.8 percent.

Saudi Arabia

The index fell 0.3 percent to 7,077 points.

Dubai

The index retreated 0.9 percent to 3,509 points.

Abu Dhabi

The index declined 0.8 percent to 4,518 points.

Qatar

The index edged down 0.4 percent to 10,451 points.

Kuwait

The index fell 0.5 percent to 7,008 points.

Egypt

The index edged down 0.1 percent to 12,967 points.

Oman

The index edged up 0.3 percent to 5,572 points.

Bahrain

The index fell 0.1 percent to 1,356 points.