Dubai: Qatar Stock Exchange (QSE) benchmark index lost 0.4 percent, with petrochemicals producer Industries Qatar dropping 1.8 percent as crude oil prices fell to a three-week low on Friday.
Saudi stocks rose in heavy volumes yesterday as investors cheered news on the issuance of a royal decree restoring financial allowances for civil servants and military personnel, while Egypt fell steeply on profit taking.
The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday the cuts had been cancelled because of better-than-expected budgetary performance in the first quarter of 2017.
The move is likely to boost consumption, benefiting the retail and food sectors, according to economists at Riyadh-based Alrajhi Capital.
Yesterday consumer cyclical shares, which have been under performing the market in the past year, were among the top gainers, helping push the index up 1.0 percent.
Electronics retailer Jarir surged 8.3 percent in its heaviest daily trading volume this year and home improvement retailer Saudi Company for Hardware (SACO) jumped 8.9 percent in unusually heavy trade.
Shares of the Gulf's largest dairy producer, Almarai , rose 1.7 percent after reporting a first quarter net profit of 328.3m riyals ($87.55m), up 13.7 percent from a year earlier. Four analysts polled by Reuters forecast a net profit of 337.4m riyals.
Almarai attributed its improved results to better cost management, lower commodity costs and lower general expenses and said it will continue "to focus on costs control, efficiency gains and cash-flow preservation".
Other sectors such as banks, especially those exposed to the retail segment, are also likely to benefit from the restored allowance to the Saudi, the Alrajhi analysts said.
"The reversal of the allowance cut also highlights improved confidence in the economy, which is positive for the equities market in general," said Alrajhi Capital.
Analysts said, however, that other economic measures such as permitting only Saudi nationals to work at retail outlets, may lead to higher operating expenses in the near term while other fiscal policies, such as next year's introduction of value added tax, will likely hurt retailers' earnings.
Yesterday also marked the first day of the Saudi stock exchange settling trades within two business days of execution, a practice called T+2, rather than the previous same day settlement.
In contrast to the Saudi market, other bourses in neighbouring Gulf states experienced a quiet day. Kuwait's index edged up 0.1 percent in below 10-day average volumes, while in Qatar edged down. Stock markets in the United Arab Emirates were closed for a public holiday.
Cairo's index dropped 2.8 percent to 12,544 points, it largest single day decline since Jan. 23, as local traders exited positions with all but two of the 30 most traded shares declining, bourse data showed.
"Lack of fresh news has left the index vulnerable to a correction and this may continue, and it may test support at around 11,900 points," said a Cairo-based trader.
Cairo for Oil and Soap was the worst performer yesterday, slumping 8.8 percent.
