Banking stocks weigh on Tadawul

Saudi Arabian shares fell sharply yesterday as banks led the index lower, while markets in the UAE extended losses on the back of lower valuations of financial and real estate stocks.

In Saudi Arabia, the stock market index dropped 1.2 per cent, falling for a third consecutive day to close at 7,694 points. Al Rajhi Bank dipped 1 per cent and Riyad Bank was down 1.4 per cent. Saudi Ceramic Company dived 5.9 per cent, despite swinging into a quarterly net profit from a loss a year earlier.

Among other stocks, Saudi Cement Company declined 5.2 per cent. On Monday, the company reported third-quarter net profit of 83 million riyals, up from 75.4 million riyals a year earlier but down about 10 per cent from the second quarter. Savola Group, however, soared 9.9 per cent, its biggest one-day surge since March 2011.

The conglomerate reported third-quarter net profit of 221.8 million riyals against a net loss of 50.7 million riyals a year earlier on higher sales and margins, an increase in shares of profit from associates and lower currency exchange losses.

Dubai’s main share index closed 1.4 per cent down at 2,740 points as all real estate stocks declined. Blue-chip developer Emaar Properties plunged 5 per cent, its biggest intraday fall since May, while Arabtec Holding slid 3.1 per cent. Al Mal Capital senior portfolio manager Vrajesh Bhandari said a “bad” set of third-quarter results from Emaar was a possibility.

The stock had seen aggressive technically-driven selling after it breached the Dh4.40 support level, he added. “Seasonally, the UAE markets don’t do very well in the fourth quarter, regaining interest with fresh capital allocation in the new year going into the dividend season,” he added.

In Abu Dhabi, the index dropped 1.2 per cent to 5,075 points, with the country’s largest lender, First Abu Dhabi Bank shedding 2 per cent and Abu Dhabi Commercial Bank retreating 0.3 per cent. On Sunday, ADCB reported a 13 per cent drop in third-quarter profit, in line with analysts’ forecasts.

In Bahrain, the index edged up 0.1 per cent to 1,525 points, in Kuwait the main index was down 0.1 per cent at 6,280, whereas in Oman the market finished flat at 4,004 points.