MARKETS/PROFIT-TAKING, OIL SEND GULF EQUITIES DOWN
Investors not excited by Saudi opening to foreigners next week
dubai — Most Gulf stock markets closed lower on Thursday as oil prices pulled back after a rally, and heavy profit-taking hit the Dubai bourse after speculative buying earlier in the week.
Saudi Arabia’s main index slipped 0.2 per cent and leading petrochemicals firm Saudi Basic Industries edged down 0.3 per cent, tracking oil, which fell after the World Bank cut its global economic growth forecast.
The Saudi banking sector gave up early gains and fell 0.6 per cent. But food retailer Abdullah Al Othaim Markets Co climbed 2.3 per cent to 110.00 riyals after Deutsche Bank raised its price target for the stock to 120 riyals from 103.
Trading volume fell for a second day in a row, indicating that investors were preparing for the holy month of Ramadan and were not expecting much from the opening of the Saudi market to direct investment by foreigners next week.
Elsewhere in the Gulf, Kuwait’s index slipped 0.3 per cent but Mezzan Holding, a producer of food, medicines and consumer goods such as soap, surged 32.4 per cent upon listing after a 65.8 million dinar ($217.9 million) private placement.
Dubai’s index dropped 2.7 per cent as two stocks which had led gains in the last few days, Amlak Finance and Arabtec, both tumbled by the daily 10 per cent limit.
Mortgage lender Amlak had previously more than doubled since trading in the stock resumed on June 2 after a six-year suspension during which it restructured debt. The company said in a bourse statement on Thursday it was unaware of the reasons behind the share price increase. Analysts have described it as a momentum play not based on fundamentals.
Construction firm Arabtec had gained 27 per cent on Tuesday and Wednesday, supported by speculation that it will soon finalise a giant development project in Egypt. Arabtec said on Thursday that no developments requiring disclosure had taken place at the company.
Some Abu Dhabi blue chips also gave up gains made earlier this week, with developer Aldar Properties down 3.2 per cent. That emirate’s index fell 0.8 per cent. Meanwhile, Qatar’s market, which had ignored the latest rally, closed 0.4 per cent higher and may have attracted cash from investors closing their positions in other Gulf markets. According to bourse data, Gulf investors were net buyers in Qatar on Thursday.
Egypt’s benchmark slipped 0.2 per cent with most stocks in the red before a monthly meeting of the central bank to discuss interest rates. Most analysts expect it to keep rates on hold.
The $334 million flotation of the Egyptian subsidiary of Dubai developer Emaar Properties may also be draining some liquidity from the market. The offer, now in its institutional stage, will open to retail investors next week.