Some Saudi investors cut positions to free up cash ahead of Ramadan; Abu Dhabi at 4-week high
Saudi Arabia's index hit a three-week low as some investors cut positions to free up cash ahead of Ramadan, showing little reaction to SABIC's surge in quarterly profit.
The benchmark ended 1 percent lower at 6,459 points, its lowest close since June 25.
"There is a lot of uncertainty about what's going to happen in the next few weeks so people have booked profits," said Paul Gamble, head of research at Jadwa Investments.
"There is usually selling in the run up to Ramadan - retail investors raise money for a period of high spending, so you get some liquidation. That may be adding to pressure to take profits."
SABIC, also known as Saudi Basic Industries Corp, the largest stock in the region, gained 0.2 percent after its quarterly net profit jumped 61 percent and beat analysts' forecasts.
"Maybe people are thinking this is as good as it's going to get for SABIC for a while given the recent decline in petrochemical prices," Gamble added.
The petrochemical and banking indexes, the two main listed sectors, fell 1.5 and 0.5 percent respectively.
Abu Dhabi's share index climbed to a four-week high as telecoms carrier Etisalat and banks support, while volumes in Dubai slumped to a seven-month low.
Etisalat gained 0.9 percent, Abu Dhabi Islamic Bank rose 1.1 percent and Abu Dhabi Commercial Bank added 0.6 percent.
The index rose 0.3 percent to 2,733 points, its highest close since June 20.
Dubai volumes are the lowest since December 2010, with many investors waiting for second-quarter results or seeking to cut positions ahead of the Muslim holy month of Ramadan, which is due to start in early August.
The emirate's benchmark shed 0.2 percent to 1,545 points.
“We will find good support for market as we get close to 1,500 levels. Dubai will hold on for numbers start to come to out,” says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
Losers outnumber gainers 14 to five. Emaar Properties slipped 0.3 percent and Arabtec shed 0.7 percent.
Elsewhere, Qatar’s index ends flat at 8,483 points.
Logistics firm Agility tumbled to a 12-month low following an adverse US court ruling, dragging Kuwait’s index to a seven-year low.
Agility’s shares fell 6 percent to their lowest close since July 2010, triggering a sell-off in the market.
Agility was the largest supplier to the US army in the Middle East during the war in Iraq. It is accused of overcharging the Army over 41 months on supply contracts the government says totaled $9.8bn.
“A lot of people would’ve thought that news would’ve been priced in but it spooked the market,” says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading. “It won’t bring buyers back to the market at this price.
“For the last two weeks, the market managed to defend its levels but it does look under pressure now.”
The index slipped 1.6 percent to 6,069 points, its lowest close since September 2004 as none of the 40 largest stocks gain.
The benchmark has slid on worries new market rules will be difficult to implement. Investment firms will need separate licences to operate their lending and investment businesses.
Elsewhere, National Bank of Oman climbed 0.9 percent after the lender’s quarterly profit beats estimates, but volumes on Muscat’s benchmark slump to a two-week low.
The index ended near-flat, down 0.09 percent at 5,982 points, trimming its July gains to 1.1 percent.
Oman Telecommunications (Omantel) and Nawras each dropped 0.3 percent.