Corporate results weigh on Saudi stocks
Riyadh, October 14, 2012
Saudi Arabia's stock market declined for a second straight day on Sunday as disappointment over third-quarter corporate earnings weighed.
Having recorded its biggest one-day drop in over four months on Saturday, a slide of 1.8 percent, the Saudi bourse fell once more, by 0.3 percent, to a fresh 11-week low.
Concerns which sent global bourses lower at the end of last week, including expectations for weak corporate earnings in the United States and Spain's debt problems, are combining with weak results Saudi companies to hurt investor sentiment.
"Clearly, the concerns over global growth prospects are weighing on the market," said Julian Bruce, EFG-Hermes' director of institutional equity sales.
"But Saudi is looking for a couple of decent numbers from somewhere and investors are not finding them. We need someone to come up with something positive to provide support."
Yanbu National Petrochemical Co slumped 3.4 percent, the sixth successive daily fall and the largest one-day drop since June 2. This followed Saturday's disclosure by the firm that its third-quarter profit almost halved from last year, thanks to reduced product prices and a unit shutdown.
Saudi Arabian Fertilizer Co fell 0.4 percent and Saudi Kayan Petrochemical Co slipped 2.8 percent after reporting a dip in profits and a widening loss respectively.
Markets in the UAE were also buffeted by external factors, with global cues and the previous day's performance in Saudi dragging both exchanges lower.
In Dubai, the measure slipped 0.7 percent, erasing all of the previous session's advance, while the Abu Dhabi bourse snapped a four-session winning streak, declining 0.5 percent.
Bucking the trend was Etisalat, which rose 0.2 percent. Its CEO said on Sunday that it would not completely sell out of any of its foreign markets and that a long-awaited network-sharing deal with domestic rival du could be in place in the next three to four months.
Dubai-listed du also ended up 0.2 percent.
Egypt's benchmark declined on the back of weekend clashes between supporters and opponents of Egyptian President Mohamed Mursi, ending the day down 0.3 percent.
Liberal opponents of Mursi fought his Islamist supporters in Cairo on Friday in the first street violence between rival factions since he took office in June. The health ministry said 110 people were injured.
"The first instant reaction was to sell at the open because investors feared that the market would go lower during the day," said Mohamed Radwan at Pharos brokerage.
Radwan added that institutional buying of real estate stocks helped provide some support during the middle of the session but lingering investor worries over the clashes would be the main driver.
Kuwait's measure rebounded from the previous session's two-week low with a 0.2 percent increase.
Qatar's index also ended higher, gaining 0.1 percent. Industries Qatar supported, rising 1.1 percent, after the Gulf's second-largest chemical producer by market value posted a 23.7 percent jump in third-quarter profit. - Reuters