Saudi tumbles after biggest one-day gain
Riyadh, July 1, 2012
Saudi Arabia's index fell in early trade on Sunday after notching up its largest one-day gain in 10 weeks yesterday as investors waited for new catalysts to justify further buying.
The index slipped 0.4 per cent to 6,681 points. It slumped to a five-month low on Wednesday, but rose 1.9 per cent on Saturday following big gains in oil prices and world stocks.
That surge came after euro zone leaders agreed on measures to cut soaring borrowing costs in Italy and Spain.
Buying by Saudi investors may increase ahead of second-quarter earnings, despite expectations of lower year-on-year profits for the kingdom's companies.
'There will be a decline in profitability perhaps with oil prices having dropped,' remarked Amer Khan, fund manager, Shuaa Asset Management.
Brent crude fell 20.4 percent in the second quarter. 'But the average price of oil is still good for Q2,' said Khan. 'I don't think numbers will be as bad as people are expecting.'
Riyad Bank gained 0.2 per cent after saying in a bourse statement it will distribute a cash dividend of 975 million riyals ($260 million) for the first half of 2012.
Most other bluechips decline, with Saudi Basic Industries (Sabic) and Al Rajhi Bank down 0.5 and 0.3 percent respectively.
Dubai's bourse rebounded in early trade following six sessions of losses and other Gulf markets also bounced off lows after moves by European leaders to ease the euro zone debt crisis boosts sentiment.
The euro jumped nearly 2 per cent, oil prices surged and world stocks rallied on Friday after euro zone leaders agreed on measures to cut soaring borrowing costs in Italy and Spain, in addition to directly recapitalising regional banks.
Most Gulf markets had tracked declines on global shares and oil prices in recent weeks as the euro zone's debt crisis deepened, heightening worries about a faltering global economy.
Dubai's index rose 0.7 per cent to 1,462 points. It was up 8 per cent in 2012, but fell 16.7 per cent since March 5's 16-month high.
In Kuwait, the index climbed 0.6 per cent to 5,826 points, up from Thursday's five-month low.
A court ruling last week dissolved a parliament dominated by opposition Islamists and reinstated the previous, more government-friendly, assembly.
In Qatar, the index climbed 0.4 per cent to 8,159 points, easing from Thursday's 10-month low. Industries Qatar was the main support, surging 4 per cent.
In Oman, a regulatory framework for Islamic finance is taking shape as government bodies move towards meeting the country's stated aim of making sharia-compliant products available to the public this year.
Legislation covering takaful (Islamic insurance) and sukuk (Islamic fixed income securities) is expected to be finalised by the end of the third quarter of the year.-Reuters