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Mon 25 Apr 2011 10:06 AM

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Petrochems lift Saudi index to 3-month high

In a fourth straight gain, Saudi's main benchmark TASI ends 1.1% up at 6,685 points

Petrochems lift Saudi index to 3-month high
(Getty Images)

Saudi Arabia's index TASI hit a three-month

high, led by petrochemical stocks, with the market buoyed by

higher oil prices in the absence of a local catalyst.

"Petrochemicals are currently the most favored by investors

with heightened oil prices keeping the sector over a solid floor

despite some stock specific profit taking activity," said Amro

Halwani, a senior trader at Shuaa Capital in Riyadh.

The petrochemical index was up 1.1 percent, with

Rabigh Refining and Petrochemical Co up 5.3 percent,

the largest gainer. It rose for a third day since Credit Suisse

upgraded it to "outperform" from "neutral."

Large cap Saudi Basic Industries Corp (SABIC) added

1.1 percent while Al Rajhi Bank rose 1.3 percent.

Oil rose above $124 a barrel on Monday, pushed higher by an

escalation of violence in the oil-producing Middle East and

post-election unrest in OPEC member Nigeria.

In a fourth straight gain, the main benchmark ended 1.1

percent up at 6,685 points, its highest close since Jan 26.

Qatar's index QSI fell to a monthly low as investors pulled back in absence of catalysts.

"There is weakness in liquidity - we don't have any news, no support," said Hani Girgis, assistant chief dealer at Dlala brokerage.

The country's largest bank by market cap Qatar National Bank fell 1.1 percent and Masraf Al Rayan dropped 1.8 percent.

But Qatar's moves to make itself more attractive to the MSCI when it undergoes a second review to obtain emerging market status will likely provide a boost to the market going forward, Girgis said.

Qatar's bourse moved to Deliver Versus Payment (DvP) system on April 11 to bolster the country's chances.

The bourse's expected decision to increase foreign ownership in companies from 25 percent to 49 percent will also help lift investor sentiment, if enacted, said Girgis.

The index ended 0.5 percent lower at 8,459 to its lowest close since March 31. Further selling pressure is forecast with the index closing between 8,300 and 8,500 points by April-end, he said.

Real estate stocks were under pressure in the UAE after bellwether Emaar Properties first-quarter results fell short of analyst expectations.

The developer behind the world's tallest tower Burj Khalifa, fell 2.9 percent after saying net profit dropped 45 percent due to losses from associate firms.

But one trader said that the market should look at property companies focused solely on real estate, rather than hospitality, as a better benchmark by which to gauge Dubai's recovery.

"Real estate companies will be interesting to look at and their performance will be more indicative of the sector's situation and give a sense on whether we are really recovering," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.

Dubai's index DFM ended 1.6 percent lower to 1,638 points, slipping from Thursday's yearly high.

In heavy trading, developer Arabtec tumbled 4.6 percent.

Abu Dhabi's index ADI ended 0.8 percent lower at 2,691 points, with six of its top 10 largest stocks falling. The benchmark slipped to a 12-day low.

Aldar Properties dropped 3 percent, accounting for a quarter of shares traded on the index.

Oman's index MSI slipped to a two-week low as bluechips weighed and interest remained muted.

"Investors are sitting on the sidelines, waiting for any new results disclosure thereby pulling down market activity," said Osama Ibrahim al-Qinna, head of brokerage at Oman Arab.

Bank Muscat and Bank Dhofar fell 0.5 and 1.2 respectively.

The benchmark fell 0.3 percent to 6,325 points, its lowest close since April 7.

A strong support level near 6,314 point should temporarily halt any further downward attempts, Al Qinna said.

Renaissance Services slipped 1 percent on selling pressure from foreign investors. Losers outweighed gainers 16 to five.

Saudi Arabia's market TASI edged slightly higher in thin trade with stocks tracking oil prices in the absence of any catalysts to drive the index upwards, analysts say.

"The major catalyst of earnings announcements is behind us so we would expect the market to re-align with international market performances and economic catalysts," said Amro Halwani, a senior trader at Shuaa Capital in Riyadh.

The petrochemicals index TPISI was almost flat but Rabigh Refining and Petrochemical Co led on volumes and shares rose 2.5 percent. Sipchem added 0.2 percent.

Brent crude futures rose above $124 a barrel on Monday after violence in Syria and Yemen escalated over the weekend, adding to fears that unrest may disrupt more oil supplies in the Middle East and North Africa.

The index rose 0.1 percent to 6,623 points.