Saudi Arabia's bourse pulled back slightly on Monday after several companies reported poor first-quarter earnings; other Gulf markets were positive, although disappointing earnings slowed Qatar's advance. The main Saudi index edged down 0.3 percent to 9,589 points, having surged 4.0 percent in the previous session on news that the market regulator would allow foreigners to buy local stocks directly from June 15.
Petrochemicals and titanium producer National Industrialisation Co (Tasnee) tumbled 5.4 percent after the firm said it had swung to a first-quarter net loss, which it blamed on lower sales prices and adverse moves in foreign exchange hedging contracts at a subsidiary.
Tasnee made a net loss of 332.5 million riyals ($88.7 million) in the quarter; SICO Bahrain and NCB Capital had forecast Tasnee would make a quarterly net profit of 150 million riyals and 151 million riyals respectively. Retailer United Electronics fell 9.7 percent after reporting a 46 percent slump in first-quarter profits; the market had expected a profit boost from King Salman's order to pay two months' bonus salary to public sector employees during the quarter.
Another retailer, Fawaz Abdulaziz Alhokair Co, surged 4.6 percent after posting a 5.7 percent rise in quarterly profit. Saudi Telecom, the Gulf's biggest telecommunications operator by market value, jumped 3.2 percent having reported a 4.7 percent rise in first-quarter profit. It made a net profit of 2.50 billion riyals; analysts polled by Reuters had on average expected 2.32 billion riyals.
Saudi Arabia's largest food products firm, Savola Group , rose 3.5 percent after posting an 11.2 percent jump in first-quarter earnings on Sunday, exceeding its own forecast. The firm made 470.5 million riyals ($128.2 million) in the quarter, or 214.3 million riyals without gains from the sale of a subsidiary, against its forecast of 178 million riyals. But Savola said profit in the second quarter would be 429 million riyals, down from 513.3 million riyals in the same period last year. Interior Ministry spokesman Mansour Turki said on Monday that Saudi Arabia had put security forces on alert for a possible militant attack on a shopping mall or energy installation, and this may have made some investors more cautious.
The Saudi index faces major technical resistance in the 9,572-9,745 point area, where the 200-day average roughly coincides with the March peak; it would need to break cleanly above that area to signal another leg up.
UAE, EGYPT Dubai's index rose 1.8 percent as property developer DAMAC continued to dominate trading, surging 11.8 percent to a new all-time closing high of 3.31 dirhams. The firm's board will discuss first-quarter results and dividends on Tuesday. Logistics firm Aramex jumped 5.5 percent after its shareholders approved the distribution of a 0.14 dirham dividend for 2014, up from 0.12 dirham a year earlier.
Abu Dhabi rose 0.7 percent and Union National Bank jumped 3.5 percent after it reported a 20 percent rise in first-quarter net profit. The lender made 610.8 million dirhams ($166.3 million), while analysts polled by Reuters had forecast an average of 547.4 million dirhams. Qatar's index underperformed the Gulf and edged up just 0.2 percent, largely because petrochemicals and metals company Industries Qatar fell 1.1 percent, having posted a 40 percent drop in first-quarter net profit.
The firm reported a profit of 951 million riyals ($261.2 million) for the three months to March 31, while analysts polled by Reuters had on average expected 1.11 billion riyals. Egypt remained gloomy after its rally ran out of steam last week. The Cairo index fell 1.9 percent on Monday despite strong earnings from Emaar Misr, the Egyptian arm of Dubai developer Emaar Properties - it posted a nearly six-fold increase in quarterly profit on Sunday. The company has applied for listing but has not yet carried out a public offer or started trading in Cairo.
Another developer, Heliopolis Company for Housing and Construction dropped 3.3 percent after the firm said on Monday its net profit rose 25.5 percent in the nine months to end-March. While solid, the rate of growth was lower than in the six-month period, when profits rose 36 percent.
Also, the company said last week it expected distributable profit in the 2015/16 fiscal year to be 200 million Egyptian pounds ($26.2 million); with the current year's nine-month profit at 153.7 million pounds and 2013/14 at 183.9 million pounds, this could mean further slowdown.
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