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Wed 16 Jun 2010 10:36 AM

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SABIC helps lift Saudi index

UPDATE 3: Abu Dhabi's ADI clings on to gains, with banks lifting the index.

SABIC helps lift Saudi index
(Getty Images)

Saudi Basic Industries Co (SABIC) helped lift the index TASI, but gains in the market were modest after the index advanced 1 percent earlier in the session.

SABIC rose 0.5 percent and Rabigh Refining and Petrochemical Co climbed 2.2 percent. Investors also picked up banking stocks.

Alinma Bank ended 0.4 percent up after confirming on Tuesday it would give SABIC a $1bn loan, plugging a financing gap at the world's biggest petrochemicals group.

"At the current stage, investors are focusing on risk more than earning, and we talk about blue chips stocks, investors are buying those stocks even with high PE valuation," said Hisham Tuffaha, head of investment research at Bakheet Investment Group.

"In addition, the Saudi economy has very attractive level of debt and GDP growth is expected to hit 3 percent."

The benchmark advanced 0.4 percent to 6,346 points.

A bout of late selling on Dubai's index DFM led the benchmark to extend losses and end lower.

Bellwether Emaar Properties remained under selling pressure and slipped 2.3 percent, weighing on the index. Air Arabia retreated 1.8 percent and Dubai Financial Market DFM declined 1.3 percent as selling appeared stock specific.

The index ended 1 percent lower at 1,488 points.

Abu Dhabi's measure ADI managed to cling on to gains from the session with banks lifting the index.

First Gulf Bank rose 1.7 percent and Abu Dhabi Commercial Bank climbed 0.7 percent.

The benchmark ended 0.3 percent higher at 2,519 points.

Several Gulf bourses were trading flat as investors chose to stay on the sidelines, and regional markets were unable to track gains in Asia and US stocks on Tuesday.

Oman Cement reversed some of Tuesday's gains and ended 3.2 percent lower, as investors booked profits.

"Surprisingly, the local market did not react to the positive global cues. It seems investors are still running for safety instead of facing stock risk," said Osama Ibrahim Al Qinna, head of brokerage at Oman Arab Bank.

"Volumes continue to be on the lighter side. We believe that earnings season could be the only starting point for money moving back into the stocks."

Oman's benchmark MSI, the only one to rise among regional peers on Tuesday, ended 0.1 percent lower at 6,097 points.

Banking stocks gained in Qatar, helping to lift the index QSI as volatility continued on the exchange after losses in the previous session.

Qatar Islamic Bank rose 1.8 percent and Doha Bank climbed 1.6 percent. The state's largest lender, Qatar National Bank edged 0.4 percent higher.

Analysts expect the market to see buying, and global developments to lend a boost.

"Last night's gains in U. S. markets are expected to further support the bounce and trigger additional short term buying," said a note from Shuaa Capital.

The index rose 0.9 percent to 7,047 points.

Kuwait's mobile phone operator Zain fell nearly 2 percent dragging on the index KWSE which extended losses from the previous session.

Zain slipped 1.9 percent, and Kuwait's largest lender, National Bank of Kuwait declined 1.7 percent, weighing on the index.

"The stock market is witnessing some weakness, we expect to see further selling pressure on Zain and its group. There are no reasons why, except the news in Qabas newspaper where it said that a fund from PIFS was selling the stock," said Jasem Al Zeraei, head of institutional sales at NBK Capital.

"We expect further selling in the market, as investor confidence continues to be weak and the summer holidays are just around the corner."

The index retreated 0.5 percent to 6,495 points.

Kuwait's mobile phone operator Zain fell nearly 2 percent dragging on the index KWSE which extended losses from the previous session.

Zain slipped 1.9 percent, and Kuwait's largest lender, National Bank of Kuwait declined 1.7 percent, weighing on the index.

"The stock market is witnessing some weakness, we expect to see further selling pressure on Zain and its group. There are no reasons why, except the news in Qabas newspaper where it said that a fund from PIFS was selling the stock," says Jasem Al Zeraei, head of institutional sales at NBK Capital.

"We expect further selling in the market, as investor confidence continues to be weak and the summer holidays are just around the corner."

The index retreated 0.5 percent to 6,495 points. (Reuters)

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