Saudi stock market sags on profit taking, Abu Dhabi rebounds

Stock markets in the Gulf diverged Monday with Saudi Arabia’s index cooling for a third session as investors booked profits on lofty prices while Abu Dhabi stock market rebounded slightly.

Riyadh’s main index fell 1.1 percent in modest trade, with roughly 70 percent of the traded shares declining. It is now down 2.3 percent over the past three sessions but is still up 14.9 percent over the last 30 days.

Banking shares, which have been the chief gainers over the past four weeks, were hard hit with all but two of the listed lenders closing lower.

Blue-chip Samba Financial Group lost 4.4 percent to 21.90 riyals and Saudi British Bank fell 4.7 percent. Shares in both lenders are now trading close to the expected fair price of analysts, according to Thomson Reuters data, a sign that long term value-traders will have little impetus to add further shares to their portfolios.

“For over a month the stock market has been performing in a silo, disconnected from the global environment even somewhat dislocated from the movement in crude oil prices,” said a Riyadh-based portfolio manager.

Over the past month, Brent oil is down 9.5 percent while the petrochemical sector is up 8.3 percent. On Monday, however, despite a bounce in crude oil prices over $47 a barrel the majority of the listed oil-derivative shares fell. National Petrochemical Co fell 2.9 percent.

Abu Dhabi’s index rose 0.2 percent after falling 1.7 percent on Sunday. Abu Dhabi Commercial Bank climbed 0.3 percent and Union National Bank added 0.7 percent.

On Sunday, UNB dropped 5.2 percent and ADCB lost 2.7 percent after both lenders issued separate statements denying last week’s Bloomberg report that they were involved in merger talks.

Abu Dhabi Islamic Bank ended flat after pulling back 0.8 percent on Sunday after the lender said that it has no plans to merge with Alhilal Bank.

Dubai’s Shuaa Capital jumped 10.8 percent, taking its gains over the last two session to 19.1 percent as investors were optimistic that its new shareholder, Abu Dhabi Financial Group, will unlock value for the investment firm. Shares in Shuaa are now trading at roughly 2.5 times the acquisition price of 0.705 dirham a share.

Shares in other second-tier companies, usually traded by local traders, also climbed, helping carry Dubai’s main index 0.1 percent higher. Union Properties jumped 9.8 percent.

MONDAY’S HIGHLIGHTS

SAUDI ARABIA

* The index lost 1.1 percent to 6,497 points.

DUBAI

* The index added 0.1 percent to 3,306 points.

ABU DHABI

* The index rose 0.2 percent to 4,230 points.

QATAR

* The index added 0.02 percent to 9,783 points.

KUWAIT

* The index edged up 0.2 percent to 5,518 points.

OMAN

* The index edged down 0.5 percent to 5,496 points.

BAHRAIN

* The index added 0.9 percent to 1,192 points. ($1 = 3.6730 UAE dirham)

Source: Reuters