Earnings drag down Saudi stocks at early trade
Weak fourth-quarter earnings at several major Saudi Arabian companies have dragged down that market at Sunday early trade, while most other Gulf bourses were firm.
The Saudi index dropped 0.4 percent as food maker Savola plunged 6.2 percent. It swung to net loss of 964.3 million riyals ($257.2 million) in the quarter from a profit of 515.3 million riyals a year ago, and said it did not plan to pay quarterly dividends in 2017.
Analysts polled by Reuters had on average forecast Savola would make a quarterly profit of 53.6 million riyals.
Banks were also weak after several posted fourth-quarter earnings below estimates. Alawwal Bank fell 5.6 percent after swinging to a net loss of 249.3 million riyals from a profit of 451.3 million; Alistithmar Capital and EFG Hermes had forecast profit of 330.5 million and 438.0 million.
Saudi British Bank dropped 3.2 percent after posting a 35 percent fall in fourth-quarter net profit; Banque Saudi Fransi slipped 2.6 percent after reporting a 61 percent profit decline; and Samba Financial Group lost 3.5 percent after posting a 12 percent profit fall.
Shares rose in many other sectors, however. Real estate developer Dar Al Arkan climbed 2.6 percent to 5.90 riyals after Deutsche Bank raised its price target for the stock to 6 riyals from 5.90 riyals.
Builder Khodari jumped 9.1 percent; it has been buoyed since November by signs the construction sector is picking up as the government makes delayed payments on its debts to companies in the industry.
Saudi Basic Industries Corp rose 0.3 percent after saying it had agreed to acquire the 50 percent it does not already own in its petrochemical venture with Shell Arabia, a unit of Royal Dutch Shell, for $820 million.
Dubai’s index gained 0.3 percent as the most heavily traded stock, builder Drake & Scull, which also has exposure to Saudi Arabia, climbed 4.4 percent.
Property developer Deyaar rose 2.0 percent after state news agency WAM reported it had signed a memorandum of understanding with Dubai South, the master developer of the area around Dubai’s Al Maktoum International Airport, for a multi-purpose development.
Strong banking shares pushed Qatar’s index up 0.1 percent, with Qatar National Bank gaining 2.0 percent, and Kuwait’s index continued a bull run which began early this month.
It added a further 2.9 percent in large volumes with all of the 10 most heavily traded stocks rising sharply as local funds and retail investors piled into the market in the hope of more near-term gains.
Source: Reuters
