SABIC heads Saudi losers; index ends lower

STOCK WATCH:Qatar's index QSI ended lower for a fourth straight session.(Getty Images)

Saudi Basic Industries Corp (SABIC) plunged, helping to drag Saudi Arabia's index TASI to a lower close as stuttering oil prices and falling global equities spur selling on the final day's trading before Ramadan.

Nine of the benchmark's 10 largest stocks declined, with SABIC the biggest loser, falling 5.3 percent and taking its losses to 8.6 percent since Sunday. Rabigh Refining and Petrochemical Co slid three percent.

"SABIC has enjoyed a good run up over the past couple of months, tracking gains in oil," said a Riyadh-based trader who did wish to be named. "Saudi petrochemicals producers get cheap oil and so if oil prices go up it makes their rivals from other countries less competitive."

Saudi Telecom Co dropped 2.5 percent and SABB slipped 1.4 percent.

"The market is volatile and has been pretty much following crude for the past few days," said the trader.

"There is no stock-specific news, but the market has rallied quite heavily this year and there is short-term uncertainty, so I don't think people want to hold big positions through Ramadan.

"Trading tends to be flat during Ramadan and so it looks like people are cashing out now."

Oil is down one percent at $68.47 a barrel at 1234 GMT and has fallen in two of the past three sessions.

Dubai's index DFM closed lower for a third session in four, with Union Properties heading losers as it plunges for a fourth day since its second-quarter earnings flagged up concerns over its debt position.

The developer fell 4.4 percent, wiping out early gains and taking its losses to 25.2 percent since its earnings were released late Thursday.

Property-related stocks were the hardest hit as declines continued following a brief rally on Tuesday, with Emaar Properties a major casualty, falling 3.6 percent. Construction firm Arabtec lost 3.7 percent.

"Real estate is about the most liquid sector and it had a decent run up that took prices above earnings expectations and so it was always the favourite to see the biggest selling pressure," said Julian Bruce, EFG-Hermes director of institutional equity sales.

Dubai's index fell 1.5 percent to 1,789 points.

"Dubai has the strongest correlation to international markets and so this is creating an opportunity for people to enter at lower levels," said Talal Al Loghani, vice-president for Gulf equity markets at Kuwait Finance and Investment Co.

"We're seeing international buying in UAE stocks and Dubai in particular."

Abu Dhabi's benchmark ADI closed lower for the third time this week as volumes slipped to a seven-session low.

Sorouh Real Estate dropped 3.5 percent and Abu Dhabi National Energy Co (Taqa) gave up early gains to fall 2.5 percent.

Qatar's index QSI ended lower for a fourth straight session as its largest 10 stocks all declined on weakening global sentiment.

Industries Qatar fell 3.1 percent, Qatar Islamic Bank dropped 2.7 percent and Barwa Real Estate lost 4 percent.

The index fell 2 percent to 6,681 points, its lowest finish July 29 and taking its losses to 5.2 percent amid a worldwide pull-back in equities.

Bahrain's measure BAX rose 0.4 percent to 1,508 points.

Kuwait's index KWSE ended lower for a third session, weighed down by losses in Asian stocks as Zain's <ZAIN.KW> surge stalls and blue chips fail to make gains.

Late selling pushed Zain down 1.4 percent, easing from the previous day's 10-month high, while rival National Mobile Telecommunications Co <NMTC.KW> (Wataniya) drops 1.2 percent.

"People are still looking at Asian markets and they fell quite sharply, which affected sentiment in the Gulf," says Talal al-Loghani, vice-president for Gulf equity markets at Kuwait Finance and Investment Co.

"Asian markets are about the best performers in the world this year and if they continue to fall, I think investors will increasingly focus on more relevant factors to this region, such as oil prices."

Kuwait's index falls 0.1 percent to 7,891 points. Gulf Finance House bucked the negative trend, surging 5.8 percent to recoup some of its 29 percent fall since it announced plans for a capital hike on Aug 6.

"GFH has fallen sharply and so speculators are looking to take advantage," said Loghani.

Saudi Basic Industries Corp (SABIC) tumbled, weighing on Saudi Arabia's index TASI.

SABIC fell 3.2 percent, taking its losses to 6.5 percent since Sunday.

Other similar Saudi blue chips were also in retreat, with Al Rajhi Bank dropping 2.2 percent and Saudi Telecom Co losing 1.9 percent.

The index fell 1.4 percent to 5,678 points and has fallen in four of the past six sessions. (Reuters)

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