MIDEAST STOCKS-Saudi Arabia Hits 9-Day Low; UAE Banks Steady

Saudi Arabia’s bourse slumped to a nine-day low on Tuesday as investors reacted to second-quarter earnings, while UAE banks were steady despite three international lenders withdrawing from debt restructuring talks with Dubai Group.

In Saudi Arabia, the benchmark fell 0.7 percent to its lowest close since July 1.

Saudi Arabian Mining Company (Maaden), dropped 3.1 percent. It reported second-quarter net profit doubled to 128 million riyals ($34.13 million) on Tuesday but the results fell far short of analysts’ estimates.

Banque Saudi Fransi fell 1.8 percent. It reported a 2 percent decline in quarterly profit on Monday, missing forecasts due to higher operational costs.

“The miss is mainly due to provisioning – the loan growth has been fast and they are being conservative,” said Ali Adou, portfolio manager at The National Investor. “Banks have learned during the crisis to have enough provisioning on the balance sheet in case there are contingent risks.”

Zain Saudi dropped 5.1 percent to a new record low after the telecom operator started a $1.6 billion rights issue.

Reuters