Stock markets in Saudi Arabia, Dubai and Oman may rise on Wednesday after a series of mostly positive first-quarter earnings reports, while stronger oil may support investor sentiment in the Gulf.
Brent crude rose 1 percent in Asian trade on Wednesday after signs of a dip in U.S. production, although gains were capped by Chinese quarterly economic growth slowing to a six-year low.
Saudi Arabia’s biggest lender, National Commercial Bank (NCB), posted a 2.8 percent rise in first-quarter net profit on Tuesday to 2.61 billion riyals ($696 million). This was above SICO Bahrain’s quarterly profit forecast of 2.15 billion riyals.
Smaller lender Bank Al Jazira posted a 42.8 percent jump in first-quarter profit, well ahead of the estimate of Albilad Capital, which had predicted a 13 percent increase.
Saudi Cement reported a 5.9 percent increase in first-quarter net to 303 million riyals against analysts’ average estimate of 292.2 million riyals.
However Saudi Basic Industries (SABIC), the kingdom’s biggest listed company, may remain under pressure after its subsidiary Saudi Arabia Fertilizers Co (SAFCO) said on Tuesday its first-quarter net profit tumbled 30 percent from a year ago.
SAFCO made 590 million riyals ($157.3 million) in the quarter, while six analysts polled by Reuters had on average forecast a profit of 725.2 million riyals.
Elsewhere in the Gulf, Deyaar Development became the first Dubai real estate company to post earnings and reported a 6 percent rise in first-quarter net profit, well ahead of SICO Bahrain’s forecast.
The news may help Dubai continue its rally after the emirate’s index rose to a six-week closing high of 3,825 points, closing above its 100-day average for only the second time since last October; the first time was on Sunday.
Omani companies have also reported mostly positive results, with Bank Muscat, Bank Dhofar and Oman Cement beating estimates.
But Omantel may come under pressure after saying the sultanate’s regulator had fined it 5 million rials ($13.0 million), a decision the company will appeal.
On global markets, Asian equities have stumbled on Wednesday as relief that China had matched its own growth target was soured by poor readings on consumer demand and industrial activity.