Mixed earnings in UAE triggered marginal profit-taking on Tuesday while Saudi Arabia's bourse declined for a third consecutive session after its largest-listed firm reported earnings that disappointed investors. Abu Dhabi's telecom operator Etisalat weighed on the bourse and dampened sentiment after it reported an 18 percent drop in third-quarter profit and fell short of analysts' forecast.
Large-cap First Gulf Bank fell 1.5 percent after reporting earnings that matched estimates. Abu Dhabi's measure slipped 0.7 percent, but it lacks direction as it remains in a 100-point range for the last four weeks. The sentiment spilled over to Dubai, where the benchmark dipped 0.8 percent, down for a second session since Sunday's five-year high. But daily trading volumes were the lowest in three weeks.
"Technically, the market should correct but it is very solid because there isn't heavy selling pressure in a bearish trend," said Mohab Maher, senior sales trader at Mubasher. "Most investors are holding their shares until the Expo announcement." Expectations are high that Dubai will win its bid to host the World Expo 2020. The results are set to be revealed on November 27.
Investors are selling some shares in firms that have reported results, despite earnings surprising on the upside. Emaar Properties lost 1.1 percent and Deyaar Development retreated 1.2 percent. The latter on Monday posted a surge in earnings. In Saudi Arabia, retail sector shares extend losses as investors booked gains after an earnings disappointment.
Fawaz Abdulaziz Alhokair tumbled 7.4 percent to a seven-week low in its third straight loss. The retailer on Monday posted an 11.8 percent rise in second-quarter profit but fell moderately short of estimates. Investors had favoured the stock because of its sharp growth in earnings, so the miss triggered heavy selling. It is still up 80.3 percent year-to-date. "This is a normal reaction and profit-taking in stocks that went up more than 20 percent this year," said Abdullah Alawi, assistant general manager and head of research at Aljazira Capital.
"We're still in a long-term uptrend - after some selling, prices will stabilise. The retail sector has proved profitable and remains strong fundamentally." Profit-taking spread across other sectors with banks and petrochemical shares weighing. Al Rajhi Bank fell 2 percent to hit a four-month low. Earlier this month, the region's second largest lender by market capitalisation posted a drop in quarterly profit and widely missed analysts' forecasts. Saudi Basic Industries Corp (SABIC) lost 2.2 percent. The kingdom's main stock index fell 1.1 percent, its third consecutive loss since last Thursday's two-month high. In Qatar, the market picked up as other regional markets declined. Heavyweights gained with Qatar National Bank and Industries Qatar up 1.8 and 1.1 percent respectively. The index rose 0.9 percent, up for a second session in last seven.
Comments
Comments are closed.