Banking shares helped lift Saudi Arabia’s bourse in early trade Tuesday as two lenders beat analysts’ earnings forecasts, amid a positive mood in other Gulf bourses.
Banque Saudi Fransi jumped 3.1 percent after it reported a 2.7 percent increase in first-quarter net profit to 1.08 billion riyals ($288 million) on Monday, after market close, topping analysts expectations.
Four analysts surveyed by Reuters had on average forecast the bank would make a quarterly profit of 964.3 million riyals.
Alinma Bank also beat analysts forecasts. The lender, a stock favoured by local day traders, said on Monday it made a profit of 391 million riyals ($104.3 million) or a 13.7 percent rise. Shares were up 1.5 percent.
The two lenders, the first to report earnings in their sector, helped boost the banking sub-index, which was up 1.1 percent as investors’ sentiment turned positive.
“These results may have shocked investors, who were not expecting banks to fair well given the tightening credit conditions, increased drawdown from government deposits, and in lieu of falling hydrocarbon dollars,” said a bank sector analyst.
The largest listed stock on the bourse, Saudi Basic Industries dropped 2.6 percent as the petrochemical giant went ex-dividend, creating a slight drag on the petrochemical sector.
Riyadh’s stock index was up 0.7 percent.
Elsewhere in the Gulf, sentiment was also upbeat with Dubai’s index adding 0.8 percent, the lion’s share of the volume being concentrated on the small and mid-cap stocks. Amusement park developer Dubai Parks and Resorts jumped 4.6 percent.
Abu Dhabi’s index was up 0.6 percent as Dana Gas added a further 1.8 percent, recouping some of the 6.7 percent losses from the previous day.
Bank shares also fared well, a possible positive spillover effect from the upbeat results of the two Saudi banks. Heavyweights Abu Dhabi Commercial Bank and First Gulf Bank rose 1.4 and 0.8 percent respectively.
In Qatar, the exchange added 0.4 percent with oil rig provider Gulf International Services jumping 3.4 percent.