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Sat 17 Jan 2009 12:24 PM

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Oil decline forces Saudi market lower

UPDATE 2: Sentiment remains negative in Saudi as oil falls and bank results remain unclear. 

Shares of Saudi Basic Industries Corp tumbled almost 10 percent leading declines in Saudi Arabia as investors fear the firm could post a fourth quarter loss as oil prices continued their steady decline.

ABIC fell 9.86 percent to 47.1 riyals, while banks also slumped with Samba Financial Group dropping 9.87 percent.

"The oil price is declining day by day and the SABIC and bank results are still not clear," said Hisham Tuffaha at Bakheet Investment group.

"Until investors have a clear outlook on SABIC and the banks the sentiment remains very negative."

Crude oil closed at about $36 on Friday.

SABIC subsidiary Saudi Arabian Fertilizers Co posted a 28 percent fall in profit in the fourth quarter.

Shuaa Capital said on Wednesday SABIC's fourth quarter profit could plunge due to a writedown from one of its units

Investors are expecting losses, but if SABIC posts a profit it will help the market," said Tuffaha.

The index was down 4.76 percent at 4,700 points. (Reuters)

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