Gulf bourses wilt as oil dampens sentiment at early trade

Bourses in the Gulf inched lower Tuesday after oil prices pulled back overnight and Asian shares weakened.

Brent oil futures were trading at $44.11 a barrel, near two-week lows, although they stabilised in early Asian trade on Tuesday. MSCI’s broadest index of Asia-Pacific shares outside Japan was near one-month lows.

Petrochemical shares were the main drag on the Saudi Arabian stock index with bellwether Saudi Basic Industries dropping 1.2 percent. The index fell 0.5 percent.

But Saudi Airlines Catering added 0.5 percent after it announced on Monday that it had renewed its contract with Oman Air. The three-year contract would have a total value of 35 million riyals ($9.33 million) and will be reflected in third-quarter results, the company said.

First quarter 2016 revenue was 559.2 million riyals.

Earnings at real estate firms have been mixed in the United Arab Emirates but the latest to report, Abu Dhabi’s Aldar Properties, posted results ahead of analysts’ expectations.

The state-linked builder of Abu Dhabi’s Formula One circuit reported a 14.1 percent rise in first-quarter net profit to 649.0 million dirhams ($176.7 million). Analysts at SICO Bahrain forecasted Aldar to make 453.6 million dirhams.

However, the stock slipped 0.8 percent.

Other shares in the sector were also weak with RAK Properties, which reported a 24 percent rise in quarterly net profit last week, dropping 1.9 percent. The general Abu Dhabi index was down 0.3 percent.

Dubai’s index slipped 0.5 percent as investors sold builders Drake & Scull and Arabtec, which have not yet reported first-quarter earnings. Their stocks were down 1.8 and 0.7 percent respectively.

Source: Reuters