Saudi extends gains into second day

RALLY CONTINUES: Saudi's main index has extended gains into a second day, helped by banking stocks. (Getty Images)

Saudi Arabia’s main index extended gains into a second day on Monday, helped by banking stocks that have gained after Riyad Bank posted a 6.8 percent rise in second-quarter profit on Sunday.

Shares of Banque Saudi Fransi surged 5.63 percent after the lender said it plans to raise its paid-up capital by 60 percent to 9 billion riyals ($2.40 billion) through rights and bonus share issues.
 
“Riyad Bank's profit surge indicates other banks will do well," said Abdulla Al-Aqil, trader at Samba Financial.

"Saudi Fransi's plan to raise capital is positive because it shows the bank is moving towards more expansion and this is encouraging investors to accumulate its shares on expectations of higher profit in the future," he added.

The benchmark, the worst-performer in the Gulf Arab region this year, climbed 0.36 percent to 9,517.32 points.

Shares of Emaar Properties declined, pulling Dubai's main index to close lower for the fourth straight session as investors expect the firm to post weak profit growth.

Emaar lost 1.42 percent, pulling the index down 0.79 percent to 5,384.77 points.

"Emaar is leading the decline as expectations for the second-quarter profit are not very positive because of its subsidiary in America that could still be hit by the subprime mortgage crisis," said Chahir Hosni, sales manager at EFG-Hermes.

Emaar's second-quarter net profit is expected to grow by an average of 13.5 percent to 1.77 billion, according to a survey of analysts last month by newswire Reuters.

Amlak gained 2.65 percent after jumping almost 5 percent earlier after revising up its 2008 profit outlook as it posted a record profit in the second quarter.

"The gains today were mainly driven by Amlak's earnings, but the market is coming off because the market is waiting for results of big names like Emaar," said Hossam El-Gendi, a trader at EFG-Hermes.

Shares of Aabar Petroleum declined as much as 9.96 percent in the session after rallying more than 33 percent this month. It had soared 9.3 percent on Sunday.

The firm's board was set to consider on Monday issuing a convertible bond to an Abu Dhabi-based strategic investor.

“There is profit-taking today because we saw heavy retail buying in Aabar on rumours, and nothing has come of them yet," said El-Gendi.

The benchmark declined 0.9 percent to 5,042.03 points.

Shares of Oman Telecommunications Co (Omantel) ended up more than 2 percent after the government invited investor interest in the planned sale of a 25 percent stake in the firm.

The stock, up more than 36 percent this year, gained 2.44 percent.

"Omantel is gaining on the news that the government has invited strategic investors to buy a 25 percent stake in it," said Adel Nasr at United Securities brokerage.

"There are a lot of buying orders from retail investors as well as local, regional and foreign institutions."

Shares of Oman's Galfar Engineering and Contracting Co, which are not listed on the main index, rose more than 1.14 percent after the firm said it had won two deals worth
50.46 million rials ($131.1 million).
 
The benchmark added 1.21 percent to 11,846.61 points.

National Bank of Kuwait and Gulf Bank declined 1.09 percent and 1.56 percent respectively, pulling the benchmark down 1.12 percent to 15,096.40 points.

Kuwait Finance House bucked the trend, gaining 0.72 percent after the Islamic lender said it plans to raise the capital of its Malaysia unit to fund expansion in Asia, according to newspaper reports on Sunday.
 
Qatar National Bank and Commercial Bank of Qatar lost 2.52 percent and 1.58 percent respectively, dragging the benchmark down 0.93 percent to 11,954.64 points.

Bahrain's benchmark fell 0.18 percent to 2,859.22 points, led by a decline in Baraka Banking Group, which edges 2 percent lower.

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