Barring Muscat stock exchange, the remaining GCC bourses (the UAE markets were closed for an Islamic holiday) slipped into red yesterday following the second-quarter results and profit booking.
The Saudi Tadawul retreated 1.71 per cent at 5675.95 points netting a loss of 98.77 points as banks and petrochemical stocks came under pressure. The index recorded its biggest one-day decline for two weeks.
Saudi International Petrochemical Company's (Sipchem) shares fell 7.1 per cent after it announced a 99.60 per cent drop in its second-quarter profit.
Saudi Basic Industries Corporation (Sabic), which gained 12.5 per cent during the previous week, also slid 8.4 per cent as it announced a 76 per cent fall in its profits for the second quarter. The firm's Chairman, Prince Saud bin Thenayan Al Saud, said yesterday that he expects petrochemical prices to improve within days.
Etihad Etisalat rose 2.1 per cent after posting 50 per cent gains in the second quarter results.
"The world economy is not showing any great signs of recovery and so one can't expect Sabic to have recovered either – it's a global cyclical company," said Keith Edwards, Head of Asset Management at Doha-based investment company The First Investor.
The banks that eased include Saudi Hollandi Bank, which fell 4.8 per cent as it reported a 72 per cent drop in quarterly profit. "Saudi Hollandi's profit fell dramatically on provisions and it is known for its conservative attitude and so tends to take forward provisions rather than wait until after the event," said Edwards. "So there are clearly problems in the banking sector."
Edwards said he expects provisions at other Saudi financial institutions to increase in the third quarter as the scale of potential losses at struggling conglomerates Saad Group and Ahmad Hamad Algosaibi & Brothers becomes clearer.
The Muscat Stock Exchange index added 2.56 per cent to 5679.14 points, its highest finish since July 2 and biggest one-day gain since May 10. Bank Muscat shares added 4.8 per cent to RO0.699 (Dh6.676). Omantel rose 3.4 per cent and National Bank of Oman shares were up 2.8 per cent.
Qatar's benchmark index fell 0.36 per cent to 6362.52 points as volumes declined by two-thirds from the previous session. Qatar National Bank shares eased 1.5 per cent. Al Khaliji Bank fell 2.4 per cent and Qatar International Islamic Bank plunged four per cent as the latter's second-quarter profit fell.
Bahrain's index closed lower for the sixth session in seven, slipping 0.83 per cent to a fresh two-year low of 1484.39 points.
Kuwait's index ended lower for the first session in the past four sessions as investors preferred to cash in recent gains. Zain and National Bank of Kuwait each fell 1.7 per cent. Wataniya lost 2.4 per cent. The index slipped 0.47 per cent to 7544 points.
Egypt's benchmark stock index climbed 0.99 per cent to 5740.14 points after several Egyptian GDR shares ended higher in London on Friday.
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