Saudi extends decline amid probe report
Riyadh, April 9, 2012
Saudi Arabia's shares extended their sharp decline amid a negative global backdrop, while a local press report saying the king has called for an investigation into market violations added downward pressure.
The index dipped 0.6 percent to 7,669 points, its fourth straight declines that trimmed 2012 gains to 19.6 percent.
Saudi King Abdullah told the Capital Markets Authority to launch an investigation into market violations and file cases against guilty parties, including the kingdom's princes, a report in local newspaper Al Sharq said.
'Some of the violations are being committed using the names of the princes and they continue despite being warned,' the paper said quoting the king.
'When the CMA charges someone with unethical trading they freeze their buying, but not the selling,' says a Riyadh-based trader who asked not to be identified. 'This started a domino wave of selling. It doesn't help that global markets are down on the day.'
Petrochemical and banking stocks are mostly lower with bellwether Saudi Basic Industries Corp (Sabic) slipping 0.9 percent and Saudi Kayan Petrochemical down 0.5 percent.
Alinma Bank fell 2.2 percent. The stock has been the recent target of speculative trade. The lender said on Sunday its first-quarter net income surged to 150 million riyals ($40 million) from 70 million riyals a year earlier, mainly due to significant growth in its core banking activities.
Samba Financial Group slipped 1.4 percent and Saudi Investment Bank shed 1.5 percent. Qassim Cement eased 0.6 percent. It said its net profit in the first quarter rose 7.7 percent on the same period last year to 158.4 million riyals due to higher sales. Losses are limited with fresh buying coming in at lower prices.
Meanwhile, Dubai's index also extended decline, but the downside was limited as market participants held back for fresh catalysts.
The benchmark dipped 0.6 percent to 1,660 points, its third straight loss, which trimmed year-to-date gains to 22.4 percent. - Reuters