Arab Times

Banks drag Saudi lower

Dubai hits one-month low

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DUBAI, Aug 22, ( RTRS): Saudi Arabian stocks were dragged lower by declining financial stocks on Thursday amid uncertaint­y over Federal Reserve policy following the release of minutes from the Fed’s July meeting, while other Gulf markets were mixed.

The minutes showed Fed policymake­rs were divided over whether to cut interest rates last month, but were united in wanting to signal they were not ona preset path to more cuts. Currencies of Saudi Arabia, the United Arab Emirates and Qatar are pegged tothe US dollar and they follow the Fed on interest rate moves.

In Saudi Arabia, the index fell 0.7% as Samba Financial Group lost 2.6% and National Commercial Bank slipped 0.8%. Banking stocks have come under pressure in recent weeks from the Saudi central bank’s decision to follow the US Federal Reserve in cutting interest rates, which analysts expect to squeeze lenders’ profit margins.

Saudi Arabia’s largest food products company Savola Group fell a further 3.8% a day after it reported 21.7% drop in second-quarter profit. Salama Cooperativ­e Insurance plunged 5.5%, the top loser on the index, after it swung to a secondquar­ter pre-zakat loss.

Dubai’s index was down 0.8% at 2,769 points, its lowest close since July 21. Blue-chip developer Emaar Properties slid 2.5%, while Emirates NBD traded 1.3% lower. Nasdaq Dubai-listed port operator DP World rose as much as 5% after reporting 26.8% jump in the first-half profit, before closing 0.4% down as global trade disputes and regional geopolitic­s continued to weigh on its outlook.

Abu Dhabi’s index was flat, with First Abu Dhabi Bank gaining 0.3%. Gulf Pharmaceut­ical Industries (Julphar) slumped 10%, extending losses to a third straight session after it recalled a batch of its Laxocodyl suppositor­y over a labelling error. Qatar’s index rose 0.4% in a boost from market heavyweigh­t Industries Qatar which increased 1.4%.

Outside the Gulf, Egypt’s bluechip index closed 0.2% down.Cigarette maker Eastern Co shed 0.6% and Emaar Misr dropped1.9%. The developer has been on the back foot since an Egyptian businessma­n filed a lawsuit claiming part of the land where it is building the sprawling Marassi residentia­l and leisure developmen­t on Egypt’s North Coast.

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