UAE bourses rebound, banks weigh on Saudi

Stock markets in the Gulf diverged on Monday, with the two main bourses in the United Arab Emirates recovering from losses in the previous session, while banks weighed on Saudi Arabia’s index.

Riyadh’s benchmark closed 0.1 percent lower, extending Sunday’s 1.2 percent decline, as the banking sub-index sagged 0.7 percent. Samba Financial Group fell 0.7 percent.

But the market’s other major sector, petrochemicals, edged up after Sahara Petrochemical reported that second-quarter net profit soared 746 percent to 96.4 million riyals ($25.7 million), much higher than NCB Capital’s forecast of 66.8 million riyals.

“The variance in estimates is due to lower-than-expected losses at Sahara’s acrylic facility and at its joint venture with Ma’aden, SAMAPCO, and lower operating expenses,” NCB Capital said in a note. Sahara also said profit jumped because some of its plants experienced scheduled shut-downs in the year-earlier period.

Shares in Sahara rose 1.8 percent to 11.59 riyals; NCB has a “neutral” rating on the stock with a price target of 10.00 riyals. The biggest petrochemical producer, Saudi Basic Industries, which is expected to report earnings this week, added 0.9 percent.

Some insurers rose after posting results. Saudi United Cooperative Insurance jumped 6.8 percent after it swung to a net profit before zakat (tax) of 30.6 million riyals from a loss of 40.4 million riyals in the corresponding quarter of 2015. But the insurance sector sub-index dropped 0.8 percent.

Elsewhere in the Gulf, Abu Dhabi’s index climbed 1.0 percent with real estate developer and property rental manager Eshraq Properties adding 1.4 percent after the company said it had appointed Jassim Alseddiqi as chairman.

Alseddiqi, also chief executive of Abu Dhabi Financial Group, said he would look to expand Eshraq through strategic partnerships.

However, real estate advisory firm JLL reported that after 18 months of relatively stable conditions, Abu Dhabi’s property market was starting to weaken.

“During Q2 2016, we have started to see the first signs of a downward trend as the decline in the oil sector, reduced government spending and weak sentiment continues,” David Dudley, head of JLL’s Abu Dhabi office, said in a report.

Aldar Properties, the largest listed real estate developer in Abu Dhabi, edged down 0.4 percent. The company is expected to report earnings on Aug. 2.

Dubai’s index recovered from its 0.8 percent decline on Sunday and added 1.1 percent, but trading volume was below the average of the last 10 days.

Emaar Properties jumped 2.2 percent to 7.00 dirhams, retesting major technical resistance on its October peak of 7.01 dirhams.

Qatar’s index rose 0.7 percent, with Qatar Gas Transport, a constituent of the MSCI emerging market index, rising by that margin.

MONDAY’S HIGHLIGHTS

SAUDI ARABIA

* The index fell 0.1 percent to 6,516 points.

DUBAI

* The index rose 1.1 percent to 3,555 points.

ABU DHABI

* The index added 1.0 percent to 4,614 points.

QATAR

* The index gained 0.7 percent to 10,554 points.

KUWAIT

* The index edged up 0.02 percent to 5,396 points.

OMAN

* The index edged down 0.1 percent to 5,812 points.

BAHRAIN

* The index fell 0.4 percent to 1,156 points.

Source: Reuters