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Wed 18 Jul 2012 10:24 AM

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SABIC in focus; Asian markets drop may weigh

SABIC's shares fell 0.3 percent in the previous session's trading, edging towards Sunday's closing price of SAR85.25

SABIC in focus; Asian markets drop may weigh
SABICs shares fell 0.3 percent in the previous sessions trading, edging towards Sundays closing price of SAR85.25.

Saudi Basic Industries Corp (SABIC), the world's largest chemicals firm, will be in focus on Wednesday when it reports quarterly results, while a negative global lead may spur Gulf investors to cut exposure to regional stocks.

SABIC's shares fell 0.3 percent in the previous session's trading, edging towards Sunday's closing price of SAR85.25, the lowest since March 2011.

Eight analysts polled by Reuters on average forecast SABIC will make a second-quarter profit of SAR6.57bn, which would be an 18.8 percent decline from the year-earlier period.

"Demand slowdown and weaker product prices will weigh on Q2 earnings," says Nitin Garg, petrochemical analyst at SICO Bahrain. "Petrochemical stocks are attractive in terms valuations, but if petrochemical prices go lower, these will follow."

Saudi Arabia's index slumped to a three-week low on Tuesday as investors cut positions following mixed earnings and ahead of the Ramadan holy month. Petrochemical and banking - the two largest sectors - headed declines.

Elsewhere, Asian shares are on the backfoot on Wednesday after Federal Reserve Chairman Ben Bernanke offered a gloomy view of the US economy, but hopes that the central bank is moving closer to more stimulus measures limited the day's losses.

Brent crude slipped 67 cents to US$103.33 a barrel by 0258 GMT, snapping five days of gains.

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