Saturday 23 June 2018

Saudi index in biggest drop in 7 weeks

Riyadh, August 11, 2010

Saudi Arabia's index made its largest decline in seven weeks and further losses were forecast as the kingdom's bourse tracked stuttering world markets and oil.

Saudi Basic Industries Corp (Sabic) fell 1.7 percent, slipping to a three-week low, Al-Rajhi Bank dipped 1.3 percent and Samba Financial Group lost 2.1 percent.
  Jouf Cement ended at 12.45 riyals on its debut.

The index fell 1.2 percent to 6,188 points, its largest decline since June 29.

"In the short-term, the market appears to be heading lower towards 6,000 points," says Youssef Kassantini, an independent financial analyst.

The index has broken below the 50-day weighted moving average at 6,224 points, Kassantini says, with the next support at 6,068. This was the bottom of a July correction, while 6,000 points will be an important psychological prop.   

"In the next two months, Saudi will be related to the international situation and I think US markets will continue to correct - US markets are not attractive because they are overbought," adds Kassantini. 

"US earnings have supported the Dow, together with a lack of negative news, but if bad news returns it should break below 10,000."    

Meanwhile, Dubai's Shuaa Capital slumped to a 16-month closing low after the investment bank posted a second-quarter loss, while the emirate's index declined for a third day in four.

Shuaa fell 4.6 percent to its lowest level since April 2, 2009 after reporting a quarterly loss of $15.4 million.  Emaar Properties fell 2.2 percent and Union Properties dropped 2.4 percent.   

The index dipped 0.9 percent to 1,483 points, a five-week low. "Fundamentals aren't screaming out for a floor in the market," says Zahed Chowdhury of Al Mal Capital.    

"In Abu Dhabi, there are issues surrounding Aldar and Tabreed and Dubai's issues are well known, with a contagion from construction and real estate affecting banks and financial companies.   

"You can argue we've reached a trough in terms of asset values, but bank loan growth hasn't been positive enough and the shape of a recovery doesn't seem to be steep. If anything, we're looking at flat growth for the rest of the year."    

Tabreed, which is based in Abu Dhabi but listed in Dubai fell 2.1 percent. The firm's recapitalisation plan and support from its largest shareholder will ensure continued operations, analysts said, after an auditors report on Tuesday cast doubt over the company's future.

Abu Dhabi's Aldar Properties fell 1.9 percent, nearing an 18-month low on worries over the developer's debt position. Aldar reported a quarterly loss of $129 million, much worse than forecast. Abu Dhabi's index fell 0.5 percent to 2,496 points, its lowest finish since Dec. 9, 2009. - Reuters

Tags: sabic | Saudi | stocks | Samba |

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