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GCC stocks may open lower as oil slips below $60

The firm made a net profit of Dh512.7 million ($139.6 million) in the three months to Dec 31. (AFP)

By Reuters

Gulf stock markets may pull back on Thursday (today) after Brent oil fell below $60 per barrel and companies in the region announced earnings and dividends that look likely to disappoint investors.

Oil tumbled on Wednesday and early on Thursday as US crude inventories were expected to hit record highs, while a possible rise in Saudi Arabia's output could stoke oversupply built up in the past few months.

Gulf markets had largely followed oil when it rallied in the last few weeks. They started consolidating this week as the commodity ran out of steam.

Recent corporate news has been mostly negative. Du, the UAE’s second biggest telecommunications operator, reported a 10 per cent fall in fourth-quarter profit on Thursday, missing analyst estimates.

The firm made a net profit of Dh512.7 million ($139.6 million) in the three months to Dec. 31, down from Dh570.3 million in the year-earlier period. Analysts polled by Reuters had on average forecast Dh586.7 million.

Saudi Arabia's Herfy Foods may decline after announcing a dividend of 1.60 riyals per share for the second half of 2014, down from 1.75 riyals in the same period of 2013.

Another Saudi Arabian firm, Tabuk Agricultural Development Company, may also come under pressure after its board proposed no cash dividend for the first time since 2004 in order to save cash for equipment upgrades.

Shares in Qatar's Gulf International Services may fall as they no longer carry the 2014 dividend.

On global markets, US indexes moved little on Wednesday and Japan's Nikkei rose on Thursday morning, while many Asian bourses including those in China were shut for the Lunar New Year holidays.