DUBAI: Saudi shares extended losses as earnings disappointed investors, while most other Middle East bourses retreated in profit-taking. Saudi’s retail and telecom sectors led declines after key companies’ profits missed analysts’ expectations.
Fawaz Abdulaziz Alhokair posted an 11.8 percent rise in second-quarter profit to SR282.08m ($75.21m), trailing a forecast average of SR299.9m, despite higher sales. NCB Capital said Alhokair’s 13.5 percent revenue growth year-on-year was the lowest quarterly growth in 15 quarters.
Telecom operator Zain Saudi fell 4.1 percent. The company posted a narrower loss for the third quarter, but still missed forecasts. Saudi Arabia’s index retreated 0.8 percent, down for a second session since Thursday’s two-month high.
In Egypt, retail investor selling weighed as the bourse fell 2 percent from Sunday’s 33-month intraday high. “It’s normal profit-taking dominated by locals and retail -there is minimal involvement from international investors and institutional volumes are lower than usual,” said Ashraf Akhnoukh, co-head of sales trading at CIBC Brokerage.
The market rose on Sunday after the UAE signed an agreement for $4.9bn worth of aid to Egypt, $1bn of which was sent in July. The deal added to the $12bn already promised from Gulf states.
“The new aid from the UAE is positive for Egypt and market sentiment but we need concrete political actions - we need to see the constitutional draft passed and the parliamentary elections to take place,” said Akhnoukh.
Egypt’s government is working on a draft constitution and will hold parliamentary elections after the document is approved.
Elsewhere, UAE markets edged lower. Dubai’s index slipped 0.4 percent, coming off Sunday’s five-year high, but still up 79.5 percent this year.“Valuations on a trailing basis look like they’re filling up but you have to factor in earnings growth momentum,” said Amer Khan, fund manager, Shuaa Asset Management. “I don’t think we’re stretched in any shape or form yet.”
HIGHLIGHTS
SAUDI ARABIA: The index retreated 0.8 percent to 8,059 points.
EGYPT: The index dropped 2 percent to 6,070 points.
DUBAI: The index declined 0.4 percent to 2,913 points.
ABU DHABI: The index slipped 0.2 percent to 3,885 points.
QATAR: The index fell 0.2 percent to 9,644 points.
KUWAIT: The index declined 0.6 percent to 7,939 points.
OMAN: The index edged up 0.02 percent to 6,653 points.
BAHRAIN: The index ended flat at 1,198 points.
Reuters
