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Gulf market report - 2 June 2007

Saudi Arabia's main stock index dropped to its lowest close in almost a month on Saturday as investors sold shares ahead of expected initial public offerings.

Shares of the 12 largest firms all declined. Saudi Basic Industries Corp. (SABIC), the world's largest chemical company by market value, led declines among the market's five largest firms, dropping 2.42%.
The company said on Saturday it would sell bonds worth about $2.2 billion to help fund its $11.6 billion purchase of General Electric's plastics unit.

Kuwait's main index closed lower after two days of gains. National Industries Co. paced declines.


HIGHLIGHTS OF SATURDAY'S TRADING

SAUDI ARABIA

* The index fell 2.01% to 7,342.18 points, its lowest since May 7.

* "There are a number of IPOs on the horizon and that is impacting the market," said Khan Zahid, chief economist at Riyad Bank. "You are also seeing normal profit taking after the market went up until last week."

* Prince Alwaleed bin Talal's Kingdom Holding Co. plans an IPO before July, Alwaleed was quoted as saying in the Middle East Economic Digest on May 26. Inmaa Bank is also planning an IPO this year, Saudi Arabia's finance minister has said.

* Saudi Arabia's index had fallen 5.5% this year to Wednesday's close, making it the Gulf's worst performer.

KUWAIT

* Kuwait's index edged down 0.03% to 11,486.40 points, its first decline in three trading days.

* National Industries Group leads declines among the 10 largest firms, falling 3.17%.

* Shares of Mobile Telecommunications Co. (MTC), Kuwait's largest firm, closed higher for a third trading day after the firm said it is interested in Qatar's second mobile phone licence. Shares gained 0.87%.

* Shares of Agility surged after it said it won a $2.8 billion deal with the U.S. government for food and other distribution. The stock jumped 3.09%.

* "The announcement this morning was good news for the company," said Naser al-Nafisi, general manager of Al-Joman Center for Economic Consultancy.

* Shares of Ahli United Bank gained after al-Qabas said a Kuwaiti investment group had made an offer to buy a 51% stake of the lender. The stock jumped 3.9%.

* Kuwait's index, up 14.12% this year to Wednesday's close, is the Gulf's second-best performer after Abu Dhabi.

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