SABIC weighs on Saudi index, Abu Dhabi stocks edge up

Riyadh’s stock market inched down 0.4 percent Thursday as shares in Saudi Basic Industries, the country’s top petrochemical firm, dropped 2.4 percent after it posted lower second-quarter profits and cut its dividend.

In Abu Dhabi, where the index was up 0.2 percent, shares in National Bank of Abu Dhabi lost 1.5 percent while First Gulf Bank gained 1.2 percent.

Both banks, which are expected to merge early next year, reported second-quarter profit drops broadly in line with expectations.

SABIC reported a 23.2 percent drop in second-quarter net profit to 4.74 billion riyals ($1.26 billion) because of lower selling prices for its products.

The result beat the 3.92 billion riyal average estimate of analysts polled by Reuters. But SABIC, whose shares had risen in the past week on hopes for a positive earnings surprise, also said it would cut its dividend to 2 riyals per share for the first half of 2016 from 2.5 riyals a year ago.

Telecommunication operators Zain Saudi dropped 6.3 percent after it reported a net loss that widened to 329 million riyals in the three months to June 30. Analysts had on average forecast a 222.1 million.

The largest food group in the kingdom, Savola, tumbled 4.8 percent after it reported a 43.2 percent fall in second-quarter net profit and cut its dividend, citing higher operating expenses and financial charges.

Dubai’s index edged down 0.2 percent. Dubai-based courier firm Aramex jumped 3.4 percent after it reported a 36 percent rise in second-quarter net profit.

Source: Reuters