Stock markets in the Gulf fell on Sunday, weighed down by weak oil prices and lacklustre second-quarter corporate results over the last few weeks, while Egypt's main index pulled back on profit-taking after a strong run. Riyadh's stock index declined 0.5 percent to a fresh 16-week closing low of 6,302 points as the petrochemical sector dropped 0.9 percent. The September Brent oil contract settled at $42.46 a barrel on Friday, down 0.6 percent on the day and 14.5 percent lower on the month.
Some major companies which reported weak earnings last week continued their downtrend with major food group Savola sinking 5.0 percent to 34.20 riyals, its lowest close since January 24. On Thursday the company reported a 43.2 percent drop in second-quarter net profit and trimmed its dividend.
But Emaar the Economic City, builder of the King Abdullah Economic City, rose 2.6 percent. The company reported a 58 percent jump in second-quarter net profit to 79 million riyals ($21.1 million), though it attributed the rise mainly to cancellation of a rental contract and to changes in infrastructure cost estimates for industrial land.
Middle East fund managers have become more bullish towards equities in the region over the past month because of flows of money into emerging markets globally, but they remain wary of the direction of oil prices, a monthly Reuters poll found.
In Dubai, the main index lost 1.0 percent but ended the month with a 5.2 percent gain.
Telecommunications operator du dropped 3.6 percent after it reported an 11.3 percent fall in second-quarter net profit to 445.4 million dirhams ($121.3 million), at the low end of expectations; analysts at EFG Hermes and SICO Bahrain had forecast 433.8 million dirhams and 487.1 million dirhams respectively.
Du needs to regain momentum in the prepaid mobile market if it is to counteract higher government taxes and halt an earnings slump, chief executive Osman Sultan said on Sunday.
But courier firm Aramex jumped a further 2.5 percent on the announcement that founder Fadi Ghandour had sold all his shares in Levant Logistics Holdings, which held his 9.9 percent stake in Aramex.
The sale was part of a move by Dubai entrepreneur Mohamed Alabbar, who has led two investor groups in buying a combined 16.45 percent stake in Aramex in order to build an e-commerce platform across the Arab world, according to a source familiar with the matter.
In Abu Dhabi the index shed 0.4 percent as Aldar Properties, which is due to report earnings this week, fell 1.0 percent and Abu Dhabi National Energy slumped 7.7 percent.
Egypt's main index ended five straight days of gains and shed 0.6 percent to 7,983 points as initial euphoria over Cairo's effort to secure an International Monetary Fund loan programme cooled.
Mohammed al-Najjar, head of research at Cairo-based El Marwa Brokerage, said the index was likely to fall back to 7,900 points but that any positive developments in the IMF talks would be a positive catalyst for equities.
Two-thirds of traded Egyptian shares declined on Sunday with Palm Hills Development dropping 1.9 percent.
Comments
Comments are closed.