Saudi stocks fall as reform euphoria fades

Dubai — Shares in Saudi Arabia pulled back on Tuesday as local short-term investors booked profits in stocks that had jumped when Deputy Crown Prince Mohammed bin Salman bin Abdulaziz announced economic reforms on Monday.

Riyadh’s stock index, which had gained 2.5 per cent on Monday mainly from banks that could win business handling the government’s privatisation plans, dropped 1.6 per cent. Trading volume shrank by almost one-third.

Samba Financial Group, lead underwriter of the recent initial public offer of Middle East Healthcare, dropped 5.3 per cent after rocketing 9.3 per cent on Monday.

Because the reforms will take years, most fund managers do not expect any immediate, extended rally of the overall stock market. However, some stocks gained on Tuesday on the belief their industries would benefit from the reforms.

Elsewhere in the Gulf, earnings determined market performance with Dubai’s Emaar Malls, a unit of Emaar Properties, jumping 4.2 per cent after it reported a 22 per cent rise in first-quarter net profit as rental income grew.

Emaar Properties, which has not yet reported earnings, rose 1.2 per cent.

But telecommunications operator du edged down 0.6 per cent after it reported a fall in first-quarter net profit because it paid a higher rate of tax than a year earlier.

Dubai’s main index added 0.2 per cent, but Abu Dhabi’s index dropped 1.1 per cent, weighed down by blue chips. The emirate’s largest listed stock, telecommunications operator etisalat, retreated 2.1 per cent after it reported a fall in first-quarter net profit.

Dana Gas tumbled 3.5 per cent after chief executive Patrick Allman-Ward said it had not been able to reach an acceptable deal with Iran on natural gas imports into the UAE, and that an arbitration process would continue.

In Egypt, the main index climbed 1.9 per cent to 7,889 points, its highest close since mid-August.