Gulf stock markets get direction from first earnings burst
Investors in Gulf bourses will look to digest the first blast of second-quarter company earnings on Wednesday, as banks in Saudi Arabia, Qatar, and Oman provide positive cues with estimate-beating profit increases.
Qatar National Bank, the largest bank in the Middle East and Africa by assets, delivered a 10 percent jump in second-quarter net profit after market hours on Tuesday, aided by the inclusion of Turkey’s Finansbank in its accounts for the first time.
The bank, always the first lender in Qatar to post numbers, is seen as a bellwether for the Qatari banking industry due to its sheer size and dominant market share in many aspects of local banking.
Qatar’s market has been experiencing a strong run of late, rising in 15 of the last 17 sessions. It closed 0.4 percent higher on Tuesday.
Oman’s largest lender, Bank Muscat, is another that holds a dominant position in the local banking market and posted an estimate-beating 0.3 percent increase in second-quarter net profit earlier on Wednesday.
It is the first Omani lender to report numbers for the period to June 30, with the rest of the sector due to file their own numbers in the next two days.
In Saudi Arabia, Banque Saudi Fransi posted a 3.2 percent rise in second-quarter net profit on Wednesday, slightly ahead of analysts’ forecasts as higher income from special commissions and lower operating expenses boosted its earnings.
The lender also posted an increased dividend for the first half of 2016, which should play well with investors.
Elsewhere in the kingdom, Jarir Marketing missed analysts’ estimates on Tuesday as it posted a 17 percent fall in second-quarter net profit after market hours.
Saudi retailers have struggled in 2016 as reduced government spending due to the impact of lower oil prices is crimping consumer spending. Analysts at NCB Capital said in a note on Wednesday that Jarir’s sales have now declined on a year-on-year basis for three consecutive quarters.
Global cues continue to be positive, the day after all markets ex-Egypt ended higher buoyed by improved oil prices.
Oil slipped back slightly on Wednesday, having surged 5 percent the previous day.
However, Asian shares came within reach of testing their 2016 peak on Wednesday as prospects of solid U.S. growth and accommodative economic policy in major markets whet investors’ risk appetite damaged by uncertainty from Brexit.
Source: Reuters
