Petchem stocks pull Tadawul index down

CAIRO/DUBAI: Saudi Arabia's stocks index fell 0.3 percent to 7,359 points, down for a third session after a drop in oil prices.

Petrochemical and banking bluechip stocks led the decline. Heavyweight Al-rajhi Bank dipped 0.7 percent and Bank Albilad shed 1.4 percent. Bellwether Saudi Basic Industries Corp. (SABIC) slipped 0.3 percent, while small-cap Nama Chemicals dropped 9.9 percent.

"The market was much more stable today but the impact of lower oil prices came through to petrochemicals," said Muhammad Faisal Potrik, research analyst at Riyad Capital.

"As long we are around the $100 mark, we should be OK. Sentiment will continue to be hit by external factors but there are attractive stocks out there in terms of valuations, especially in petrochemical and banks sectors."

Other Gulf markets also took cues from decline in global shares.

In Qatar, the index ended 0.4 percent lower, moving sideways in a tight-range for the last seven session. Analysts expect the bourse, considered a defensive play, to outperform regional peers if downward pressure from global markets continues.

Heavyweights Industries Qatar and Qatar National Bank slipped 1 and 0.3 percent respectively. Qatar Islamic Bank shed 1.8 percent.

In UAE, Abu Dhabi's benchmark fell 0.3 percent to its lowest close since Feb. 16.

Elsewhere in the country, budgetcarrier Air Arabia helped lift Dubai's bourse by 0.3 percent, which halted an eight-session losing steak.

Shares in Air Arabia rallied 1.9 percent after the Sharjah-based carrier posted estimate-beating earnings.

Local markets are expected to be muted in coming weeks as summer rolls in.

"Summer returns won't be as attractive as rest of the year and retail investors will remain cautious but UAE and Saudi Arabia are already getting bargain hunters and we should see some more of that," said Amer Khan, fund manager, Shuaa Asset Management.

Orascom Construction Industries (OCI) gained yesterday ahead of an expected demerger approval, helping lift Egypt's bourse, while most Gulf markets fell as falling oil prices and global shares weighed.

Shares in OCI, Cairo's biggest listed company, gained 3.4 percent, with the main index up 1.1 percent. A May 17shareholders meeting is to vote on a proposal to split the firm's construction and fertilizers businesses into two companies.

"The potential in OCI is what pushed the move upward along with CIB maintaining its targets," said Hisham Metwalli of Arab Finance Brokerage. "It is mostly short-term trading awaiting what will happen on 23-24 May." OCI said the longplanned demerger would widen the investor base of the two new entities, make their management more flexible and make their credit profile more attractive to lender.

Commercial International Bank gained 1.8 percent ahead of its results on Wednesday. The bank is expected to post strong first-quarter numbers.