World Markets

MIDEAST STOCKS-Banks, petchems drag down Saudi, property lifts Dubai

Credit: REUTERS/Faisal Nasser

Saudi Arabian stocks dropped sharply on Tuesday as banking and petrochemical shares weakened, while builder Arabtec Holding posted its sharpest single-day rise in two and half years after announcing a potential merger, helping to lift the Dubai index.

By Shakeel Ahmad

Sept 10 (Reuters) - Saudi Arabian stocks dropped sharply on Tuesday as banking and petrochemical shares weakened, while builder Arabtec Holding ARTC.DU posted its sharpest single-day rise in two and half years after announcing a potential merger, helping to lift the Dubai index.

Saudi's index .TASI was down 1.1%. Al Rajhi Bank 1120.SE dropped 2% and petrochemical maker Saudi Basic Industries 2010.SE shed 2.8%.

Saudi Enaya Cooperative Insurance 8311.SE lost 4.9% after its accumulated losses reached 40% of its capital.

Real estate firm Arriyadh Development 4150.SE and gym network operator Leejam Sports 1830.SE shed 3.3% and 2% respectively as the stocks traded ex-dividend.

Tuesday's losses have left the index trading at meagre gains of 1.5% for the year. It jumped as much as 20% in May, led by foreign investors who have been net buyers every month this year as Saudi stocks joined the MSCI and FTSE Russell emerging market indexes.

The market remains under pressure with the kingdom's economy at risk of contraction and Middle East funds planning to reduce investment in Saudi Arabia.

In Dubai, the index .DFMGI rose 0.4%, with its largest listed developer Emaar Properties EMAR.DU gaining 0.6%.

Arabtec Holding soared 11.3%, its biggest single-day gain since February 2017. The firm said on Tuesday it had begun a review to explore the possibility of merging its construction business with Abu Dhabi's private rival Trojan Holding.

The builder's shares traded at 1.77 dirhams, down from 28.73 dirhams at their mid-2014 peak when property prices began to head downwards.

Dubai property prices have tumbled 25-35% since mid-2014, and are expected to decline further this year and next amid a slowing economy and an oversupply of housing units.

The Abu Dhabi index .ADI was up 0.4% with Aldar properties ALDR.AD adding 1.8%. The firm this week said it was launching a residential project on Saadiyat island that would be open to all nationalities.

This is the first development on Saadiyat island since April, when Abu Dhabi amended its real estate law to allow all foreigners to own land and property in investment areas on a freehold basis.

Qatar's index .QSI traded 0.7% higher lifted by gains in financials with Qatar National Bank QNBK.QA adding 1.2%.

Egypt's blue-chip index .EGX30 closed 0.5% higher after its inflation rate declined to 7.5% in August, the lowest in years as the country approaches the end of International Monetary Fund-backed economic reform programme that during 2017 saw inflation rise to a high of 33%.

The inflation data clears the way for further rate cuts when the central bank meets later this month after having delivered a rate cut in August.

SAUDI ARABIA

The index .TASI fell 1.1% to 7,965 points

ABU DHABI

The index .ADI was up 0.4% to 5,096 points

DUBAI

The index .DFMGI rose 0.4% to 2,892 points

QATAR

The index .QSI was up 0.7% to 10,376 points

EGYPT

The index .EGX30 was up 0.5% to 14,956 points

OMAN

The index .MSI was up 0.3% to 3,998 points

KUWAIT

The index .BKP edged up 0.1% to 6,424 points

Bahrain

The market was closed for a public holiday

(Reporting by Shakeel Ahmad in Bengaluru, editing by Ed Osmond)

((shakeel.ahmad@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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